Investment Advisory Compliance Services

Investment Adviser Registration

The regulatory structure for investment advisors is complex and confusing, even for the seasoned professionals. The LeGaye Law Firm P.C. has substantial experience in counseling investment managers, hedge fund advisors and financial planners on the alternatives available in the structuring and registration of their advisory activities, as well as providing on-going operational and compliance support, which allows you to efficiently address their regulatory and operational needs. The goal of The LeGaye Law Firm P.C. is to not only to obtain the respective registrations with the SEC and or state jurisdictions, but to also make sure you have the compliance tools necessary to successfully circumnavigate the regulatory environment, we also work with you to develop the following compliance tools:

• Supervisory Compliance Controls and Written Policies and Procedures Manuals
• Codes of Ethics
  • A books and records retention program, which includes:
  • Personal trading records
  • Registration records
  • Bookkeeping records
  • Account ledgers
  • Client account files Client disclosure documents and privacy notices
• Business continuity plan which incorporates regulatory concerns
• Client contracts

For a more detailed discussion of the issues related to the registration of an investment adviser, please see the white paper prepared by The LeGaye Law Firm PC, “Investment Adviser Registration and Regulatory Issues” or contact The LeGaye Law Firm P.C.  

Top 

Mock Regulatory Exams & Risk Assessments

The LeGaye Law Firm is well equipped to assist investment and hedge fund advisors in taking proactive steps to identify and assess areas of risk. Part of the legal process provided includes on-site mock regulatory exams. The exam process is also an integral part of the risk assessment and review necessary to meet a firm's annual testing requirement. As part of the testing and risk assessment process, the firm will evaluate all aspects of your business subject to regulatory legal compliance, including:

• Trading and Transaction Records
• New Account Applications
• Customer Complaints and Arbitration Matters
• Affiliated Persons' and Advisory Personnel Files
• Advertising and Marketing Materials
• Written Policies and Procedures Manuals
• Codes of Ethics and Personal Trading Records
• Registration Records
• Performance and Web-Site Advertising
• Client Disclosure Documents and Privacy Notices
• Testing of Anti-Money Laundering programs, Business Continuity Plans, Regulation S-P controls and Other Compliance Programs
• Client Contracts and Account Files
• Supervisory Compliance Controls
• Bookkeeping Records
• Account Ledgers
• Processes for Evaluating Actual and Potential Conflicts of Interest and Mitigation thereof

Upon completion of the mock examination and/or risk assessment, The LeGaye Law Firm P.C., will provide an initial finding report that will address any critical legal concerns that may require immediate action. The firm will then issue a final report, which addresses the annual review process for the investment adviser.  

Top 

Regulatory Inquiry Responses

Legal responses to inquiries from the SEC or other regulatory bodies must be prompt, carefully considered and accurate in addressing each issue or deficiency, particularly if allegations of a securities law violation are involved.

The LeGaye Law Firm, P.C. understands our clients and knows their businesses. That enables the firm to provide prompt, effective responses to legal regulatory inquiries and allegations at both the state and federal levels. Having extensive experience in responding to SEC, FINRA and other official inquiries, the firm is prepared to respond to issues or claims, including regulatory inquires related to cycle and sweep examinations, improper trade practice issues, and or other regulatory issues.  

Top 

Other Investment Advisory Services

The LeGaye Law Firm, P.C. also provides the following ongoing counsel and legal support services:

• Transitioning to a new business association (such as an independent RIA)
• Compliance with the Investment Advisers Act of 1940, the Investment Company Act of 1940 and other laws pertaining to investment advisers and their representatives
• Mock SEC examinations and firm risk assessments to address the annual review of the policies and procedures to determine if they continue to work as designed or whether changes are needed to assure their continued effectiveness.
• Responses to regulatory inquiries and investigations
• Review and assessment of client disclosures in Forms ADV, Offering Memorandums, performance marketing materials and RFP responses
• Counsel regarding fiduciary obligations, reporting and recordkeeping requirements, soft dollar arrangements and best execution obligations, use of third-party solicitors and trade allocation and aggregation considerations
• Creation, testing and maintenance of compliance programs
• Customized Codes of Ethics
• Development of Regulation S-P policies (privacy notices) including processes to safeguard confidential client information

Top 

Investment Advisory Contracts and Agreements

The securities and financial industry requires legal contracts be negotiated, agreements drafted and records maintained, both for business and legal regulatory functions. The LeGaye Law Firm, P.C.'s extensive experience in investment advisory issues, allows the firm to bring a unique mix of industry and regulatory experience, which assists our clients avoid legal and regulatory problems and efficiently implement and manage corporate agreements, contracts and other necessary forms of documentation.

Legal services offered include advice related to the negotiation and drafting of contracts or agreements, a review of proposed or existing contracts, agreements and other documents to ensure compliance with current legal regulatory requirements. The following is a representative summary of some of the various contracts and other legal documents the firm can negotiate, draft, evaluate or revise:

• Investment Adviser Client Contracts
• Sub-Advisory Agreements
• Investment Adviser Independent Contractor Agreements
• Investment Adviser Employee Agreements
• Solicitor's Agreements and Solicitor's Disclosure Document
• Third-Party Service Provider Contracts
• Non-Disclosure Agreements
• Wrap Program Agreements
• Operating Agreements

Top 

Written Policies, Procedures & Internal Controls

The LeGaye Law Firm P.C., assists investment advisers in the development of effective written policies, procedures and internal controls that help prevent abuse, detect and mitigate conflicts of interest, reduce client risk and maintain compliance with client protocols and regulatory requirements. This approach helps to define the roles and responsibilities of senior management and supervisors while promoting successful business practices. To accomplish this, ongoing legal counsel and support services may include:

• Creation, review or enhancement of Written Supervisory Procedures (WSPs) or written policies and procedures manual
• Development or review of Code of Ethics manual, including personal trading processes, mistreatment of material non-public information, and counsel on internal trading surveillance programs
• Employee training on new policies and procedures
• Development of Anti-Money Laundering policies and procedures, including an annual independent audit
• Analysis of portfolio management policies and procedures, including oversight of trading activities, allocation of mixed use items for soft dollar arrangements, assessment of investment opportunities and consistency with investor goals, disclosure of best execution practices and review of best execution processes and compliance with SEC recordkeeping requirements
• Evaluation and implementation of recordkeeping and document retention policies
• Review and assessment of privacy policies and procedures regarding safeguards for protecting confidential client information
• Analysis of conflicts of interest processes
• Annual testing of policies, procedures and internal controls, with written assessment upon request

Top 

Client Disclosure Documents

After evaluating existing client disclosure documents, The LeGaye Law Firm P.C. can provide a legal assessment of the findings along with recommendations on how to enhance current disclosure documents. Some examples of client disclosure documents the firm can draft, evaluate or revise include:

• Form ADV Part II (the client disclosure brochure)
• Client agreements and new account forms
• Private placement memorandums
• Advertising and sales literature
• Wrap-fee program client documents
• Hedge fund client documents
• Investment policy statements
• Financial plans
• Quarterly performance reports
• Monthly/quarterly invoice statements

Top