Compliance Testing – Quarterly COE reports

An easy testing function is  your quarterly Code of Ethics personal securities transaction reports.

1.  Have they been received within the time required (10 days from the end of the quarter for states; 30 days for SEC registered advisors)

2.  Even if no transactions, I suggest that employees provide a report signed to that effect.  Transfers liability from the CCO to the employee.  With SEC’s current target on the back of CCO, transfer as much as possible.

3.  Review personal securities transaction reports for trading in restricted or watch list securities, any pre-clearance requirements, trading patterns, etc.

4.  Don’t forget to document the review by signing the reports.

 

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