SEC Reminds Funds of Compliance’s Importance

The Office of Compliance Inspections and Examinations at the Securities and Exchange Commission reminded fund companies that with all of the staffing and operational cutbacks taking place, compliance is an area where shortcuts cannot be tolerated.

The open letter was addressed not only to chief executive officers of fund companies, but also to those at other SEC-registered firms, including broker/dealers, registered investment advisors and transfer agents.

“Experience has taught us, again and again, that giving short shrift to regulatory and compliance subjects a company’s investors, employees, management, directors and every other stakeholder to unacceptable risks,” said SEC Chairman Christopher Cox. “Compliance programs have made huge strides in recent years in becoming more formalized and more robust.”