At Diversified Management Resources
Telephone: 617-484-0074 Ext. 201
NICSA Partners with Diversified Management Resources for Compliance Practices Survey
Boston - August 18, 2004. The National Investment Company Service Association (NICSA) announced today that it is partnering with Diversified Management Resources (D.M.R.) to conduct a survey to confirm the state of the securities industrys preparation for federal securities regulations that require mutual funds and investment advisers to adopt and implement a Compliance Program and to designate a Chief Compliance Officer. Mutual funds must also obtain the approval of the fund board. The compliance date is no later than October 5.
The new regulations are among the most far-reaching to be introduced in recent years. The Chief Compliance Officer for a mutual fund must certify the adequacy of compliance policies and procedures of a funds service providers, including its investment advisers. For this reason, a significant fall-out effect of the regulations is that many transfer agents, custodians, administrators and broker-dealers - which are not directly subject to the new regulations - must also prepare for the October 5 deadline if they provide services to mutual funds.
The Survey will assess steps firms have taken to date to put in place the policies, procedures and controls necessary to ensure compliance with the regulations. Also included are questions concerning securities firms experience with the Customer Identification Program and Anti-Money Laundering provisions of the USA PATRIOT ACT.
"This is a very timely project," says Barbara V. Weidlich, president of NICSA. "More than ever, compliance is a concern not only to compliance officers but to all executives in the money management business. Operations professionals, represented in the NICSA membership, have significant responsibilities for many business functions directly affected by new requirements."
Charles ONeill, principal of Diversified, noted that as was the case when the Anti-Money Laundering regulations were strengthened last year, the new rules are largely risk-based. Firms will need to determine, in the context of their own business activities, how to best meet the new requirements.
Key aspects of the new regulations include:
- Each mutual fund or investment adviser must designate a Chief Compliance Officer to administer its compliance program. Mutual fund CCOs will report directly to the funds board.
- Each mutual fund or investment adviser must adopt and implement written polices and procedures reasonably designed to prevent violations of the federal securities laws specified in the new rules. A mutual funds compliance program and the policies and procedures of any service providers must be approved by the funds board.
- For mutual funds, the compliance program and the CCO must be approved by the fund board prior to October 5.
- A mutual funds or investment advisers compliance policies and procedures must be reviewed at least annually for their adequacy and the effectiveness of their implementation. The first annual review must be completed no later than 18 months after the adoption of or approval of the compliance policies and procedures.
The survey which will be launched within the next week, with top line results tabulated and reported immediately thereafter. Participants will receive an executive summary of results at no cost. A more in-depth report will be available for $495. NICSA members will be eligible for a 10% discount.
NICSA will send an invitation to our member contacts via email; this will include a link to the online survey.
The National Investment Company Service Association (NICSA) is a not-for-profit trade association providing leadership and innovation in educational programming and information exchange within the operations sector of the worldwide investment industry.
NICSA membership totals more than 400 companies operating in major financial centers in the United States, Europe and Asia. The membership represents all segments of the mutual fund industry including mutual fund complexes, investment management companies, custodian banks, transfer agents and independent providers of specialized products and services.
NICSAs services to members include education, training and networking opportunities through conferences on a wide range of industry issues and developments; specialized publications, and access to NICSAs membership directory. NICSA also offers an On-Line Learning Center featuring the Certified Mutual Fund Specialist Program, the first-ever certification program of its kind.
Diversified Management Resources, Inc is a business development consulting firm supporting the financial services community. The companys business includes a retained executive search division, a strategic resources division and a creative marketing services division.
The company is well known in the investment community. Principals of the firm have created and managed many successful research projects.
Charles ONeill, president, had a along career with leading financial companies, including Sun Life of Canada, Putnam Investments and the Colonial Mutual Funds.
Gordon Evans, principal, was for many years a chief executive of Wall Street firms. He retired several years ago from State Street Research, where he headed retirement plans sales and marketing.
Robert Goldberg, who joined D.M.R. as of August 1, is a past president of NICSA and had been managing director of Acadient, an online investment education company. He has been recognized as one of the mutual fund industrys top ten business leaders.