Registered Investment Adviser Services

All Registered Investment Advisers (“RIA”) are required to have a compliance program that addresses certain regulatory requirements; written policies and procedures, designated chief compliance officer, annual program review, as well as other elements. The effective administration of a RIAs compliance program is challenging.

Bates Compliance’s Annual Compliance Program Support provides the following core services:

• Annual Updating Amendment of Form ADV
• Rule 206(4)-7 | Annual Program Review
• Regulatory updates to applicable compliance policies and procedures
• Annual compliance meeting
• Compliance program calendar
• Block of general consulting hours

Bates also provides additional tailored services to be added to the core services depending on a RIAs needs, such as:

• Assessment, development, and implementation of policies and procedures for new regulatory rules
• Regulatory filing assistance (Form U4, U5, 13F, and PF)
• Policy and procedure drafting and editing
• Document consistency review – marketing > agreements > policy and procedures > disclosures
• Periodic CCO or compliance department support meetings

This service assists the RIA with the administration of their compliance program. The core annual support services are designed to help address the main elements of a compliance program. It does not include the performance or testing of any specific compliance policy or procedure tasks. Clients have the option of adding in those activities which would be identified and scoped separately as a service.

All Registered Investment Advisers (“RIAs”) are required to file their Annual Updating Amendment (“AUA”) within 90 days after their fiscal year end.

Bates Compliance will assist in the following ways:

• Review Preliminary and/or Final Renewal FINRA Statement to confirm adequate funding is available in the RIA’s FINRA account.
• Update the RIA’s Form ADV 1, ADV 2, and other documents as needed through communications with and data provided by RIA.
• Review the RIA’s client base to confirm firm registrations and notice filings are made in the appropriate jurisdictions.
• Upload/Submit all required documents via FINRA’s IARD/CRD Portal.

This service assists the RIA with all required updates to various filing documents. New registrations in additional jurisdictions, IAR registration, or writing new regulatory disclosure content for an RIA, are distinct from the AUA program, and may be added as a separate service. 

All SEC-Registered Investment Advisers (“RIAs”), as well as those engaging in established best practices, are required to perform an annual review of the firm’s Compliance Program under Rule 206(4)-7. This is a review to ensure adequacy and effectiveness of the RIA’s Policies and Procedures and Compliance controls.

Bates will, generally, conduct this review consisting of the following stages:

• Introduction and Initial Firm Review
• RIA Document Request
• Analysis, Interviews, and Follow-up Requests
• Report Drafting
• Delivery of Report and Exit Interview

This service is available for a wide range of clients, from small, one-member firms to the largest in the industry. Bates can scale to deliver a review consistent with the complexity of an RIA business model. Bates annual review report will help RIAs identify areas of weakness and provide recommendations for improvements. Have a sound compliance program is essential. Whether desiring a third-party review perspective occasionally or establishing an ongoing review relationship with someone who knows your RIA business model, the Bates Annual Review service is tailored to your needs.

Registered Investment Adviser (“RIA”) compliance programs will at times need resource assistance or added expertise. Whether it is a change in compliance program personnel, changes in the business, or application of regulatory requirements, RIAs may need temporary assistance.

Bates Compliance provides “As-Needed” compliance program support on a project or hourly basis for various program needs such as, but not limited to:

• Providing interim support for vacant compliance department positions
• Creating, updating, or reviewing compliance program related documentation:
  • Compliance policies and procedures
  • Code of ethics
  • Business continuity and disaster recovery plans (“BCP”)
  • Information security plans
  • Regulatory disclosure documents
  • Client notices and agreements
• Performing marketing and advertising reviews
• Performing other tailored compliance policy reviews and testing
• Developing and delivering compliance related training
• Supporting vendor due diligence activities
• SEC or State examination support

This is a temporary service to support a RIA’s periodic need for assistance with compliance program administration. Each service includes a statement of work and is engaged as a project with an estimated beginning and end date. Bates consultants and our subject matter expert affiliates can provide experience in the many areas of regulatory compliance.

Registered Investment Advisers (“RIA”) may desire a third party or an Independent Compliance Consultant (ICC) to help remediate a compliance violation or program deficiency. These reviews may be the result of an internal audit finding, in anticipation of a regulatory action, or in response to a regulatory proceeding. Due to the nature of an independent compliance consultant review, they may be performed through a firm’s outside counsel and/or as prescribed by a regulator. 

Many Bates consultants and experts are former regulators and are very familiar with regulator expectations.

Bates will, depending on the specifics of the circumstance or regulatory order, conduct this review consisting of the following stages:

• Introduction and Initial Review of the Violation
• Request and Analysis of Related Documentation
• Interviews with Relevant Parties
• Drafting of Report
• Delivery of Report and Remediation Recommendations

This service is generally in response to a specific program weakness, deficiency, or violation. For ICC’s involving regulatory orders, they typically include an initial review with a follow up review a year later. An ICC performed under a regulatory order results in a review report with remediation recommendations that is provided to both the RIA and the regulator. For non-regulatory ICC’s, the review and report is typically coordinated through the firm’s outside counsel.

Bates may involve other practice areas (such as our Data Analyses and Analytics) as well as our Bates subject matter expert affiliates to provide particular experience to the review service.

All Registered Investment Advisers (“RIAs”) are subject to examination by their regulatory authority (state securities division and/or the SEC). This Mock Regulatory Exam service provides firms the opportunity to experience a dry run of the examination experience. The examination follows a routine regulatory exam process with periodic evaluation points to help RIAs assess their preparedness.

Bates Compliance will, generally, conduct this mock exam under the following stages:

• Introduction and Initial Firm Interview (presentation)
• Evaluation of Firm Interview
• Mock Exam Document Request
• Evaluation of Firm’s Document Production
• Personnel Interviews (examine like interviews of select RIA personnel)
• Evaluation of Personnel Interviews
• Exit Interview and Summary of Preparation Recommendations

This is a preparatory service for RIAs wanting to test their readiness for a regulatory examination. Clients have the option of adding on an analysis of business activities or the adequacy or testing of policies, procedures, or practices contracted as separate services.

Regulatory registration is determined by several factors depending on a firm’s business model, assets under management, location of firm and clients, and type of investment offering. Before providing investment advice and receiving compensation, it is critical that a firm operate with the appropriate registration.

Bates Compliance provides the following registration services:

• Exempt Reporting Adviser (“ERA”)
• State Investment Adviser
• SEC Investment Adviser
• Transition (State to SEC or SEC to State)

Advisers that claim an exemption from registration, typically private fund or venture capital advisers (“private fund advisers”) must still report certain information to regulatory authorities (the SEC and/or State) and comply with applicable regulations. Generally, the exemption is available to private fund advisers that have assets under management below $150 million.

Bates will aid in the drafting and submission of all required documents to report Exempt Reporting Adviser (“ERA”) firm. Bates takes a holistic approach to the registration process by first working with your firm to design, create and implement the ERA’s compliance obligations prior to completing your report process. The SEC (as well as state regulators) will expect that, upon approval, your firm is meeting all the regulatory requirements.

The ERA will receive upon completion a host of various documents that include, but are not limited to:

• Form ADV 1
• Policies addressing ERA compliance requirements, including but not limited to:
  • Anti-Fraud
  • AML
  • Conflicts of interest, including gifts and other employee conduct
  • Insider Trading
  • Investor Privacy
  • Marketing
  • Pay-to-Play
  • Proxy Voting
  • Recordkeeping
  • Regulation D filings
  • Valuation

In addition, the client will be able to leverage the knowledge of the Bate’s consultant to explain the exempt reporting adviser obligations.

Once approved by the SEC, we recommend speaking a Bates consultant to inquire about additional services Bates can offer to help the ERA maintain compliance with various ongoing obligations. This can include, but is not limited to, assistance with your Annual Updating Amendment (“AUA”), your Form D filing requirements, other state specific requirements, modifications to offering documents and marketing materials, special considerations for ERISA investors, and annual bad actor certifications.

Bates will aid in the drafting and submission of all required documents to register a Registered Investment Advisor (“RIA”) firm. Bates takes a holistic approach to the registration process by first working with the firm to design, create and implement the RIA’s compliance program prior to completing its registration. The SEC (as well as state regulators) will expect that, upon approval, the firm is meeting all the regulatory requirements from that point forward.

The RIA will receive upon completion a host of various documents that include, but are not limited to:

• Form ADV 1
• Form ADV 2
• Form U4(s)
• Compliance Manual
• Privacy Policy
• Form CRS
• Client Agreements

In addition, the client will be able to leverage the knowledge of the Bate Compliance consultant to explain the content and implementation of all required documents. 

Once approved by the SEC, we recommend speaking with a Bates consultant to inquire about additional services Bates can offer to help the RIA maintain compliance with various ongoing obligations. This can include, but it not limited to, assistance with Annual Updating Amendment (“AUA”), Annual Review (i.e. 206(4)-7 Review), 13F Filings, or compliance document updates.

Bates Compliance assists growing Registered Investment Advisers (“RIA”) with transition filings from State to SEC registration. Rule requires State registered RIAs transition to SEC jurisdiction based upon a number of “triggers”. Most commonly, this happens when firms hit $100M in regulatory assets undermanagement.

Bates will review and/or draft various required documents for adherence to SEC rule(s) that include, but are not limited to:

• Form ADV 1
• Form ADV 2A & 2B
• Form U4(s)
• Compliance Manual
• Privacy Policy
• Form CRS
• Client Agreements

Once approved by the SEC, Bates will also assist with the formal withdrawal from State registration. In addition, the client will be able to leverage the knowledge of the consultant to explain the content and implementation of all required documents.

Please note that once the RIA is newly transitioned to the SEC, the RIA will likely undergo their first SEC Examination within 12-18 months from the approval date. This is a good time to talk to a Bates consultant about the additional requirements your RIA will be required to meet. Some requirements, such as the required Annual Review of compliance Policies and Procedures under Rule 206(4)-7, are all services provided by Bates Compliance.

Form 13F

Registered Investment Advisers ("RIAs") with investment discretion of over $100 million or more of equity securities that trade on an exchange (Section 13(f) securities) must report those holdings quarterly by filing a Form 13F. The Official List of Section 13(f) Securities shows the securities that firms must report on Form 13F. The list is published quarterly.  It is available for free by going to https://www.sec.gov/divisions/investment/13flists.htm.  

 Bates will prepare and submit the Client’s Form 13F including:

• Identification of qualified securities
• Multiple manager reporting
• Preparation of XML Information Table
• Submission of XML Table on EDGAR

This service assists the RIA with identifying, uploading, and submitting reporting data. It does not include evaluating a RIA’s holdings.

Keeping investment advisers up‐to‐date on Rules and Regulations is a crucial part of maintaining a robust compliance culture. Bates Compliance and Regulatory Alerts provide firms with keen insights on what is changing and what they can do to stay compliant.