The existence of a firm's risk assessment policy and procedures is presumed in this post-economic meltdown era. A well-implemented risk assessment process helps identify events that could result in negative consequences, and helps a firm focus its resources on a prioritized list of risk reduction activities.

The SEC has published guidance on the preparation of a risk assessment, which includes a list of risk categories that firms should include in their own assessments. Using the identified risk categories, a firm must determine:

• Which of the identified risks are present at our firm?
• How might these risks affect our firm and its operations?
• Are adequate controls in place to manage or eliminate these risks?

This month's newsletter; "Risk Reduction Strategies for IA Registration and Custody Issues," is an excerpt from one of our newest courses, Risk-Based Investment Adviser Supervision. In this excerpt we address two risk factors identified by the SEC as high risk for investment advisers, along with specific steps that should be taken to reduce or eliminate these factors.

Click here for your copy of "FINRA Rule 5131 — New Issues Allocations and Distributions".

About the Course

Risk-Based Investment Adviser Supervision is an intermediate to advanced level course designed to help supervisors and compliance professionals focus resources on testing and supervision of issues most relevant to regulators.

The starting point of a sound compliance program is the assessment of risk factors. The course includes a list of SEC-defined risk categories for IAs that will help identify high-risk activities at the firm, and prioritize resources to minimize potential harm to the firm and its clients.

Along with a brief explanation of the regulatory focus for each risk category, the course includes a list of specific testing procedures to help flush out any unknown high-risk activities. Some of the testing procedures are designed to be used during a risk assessment, and others are designed to be used as part of daily supervisory duties.

Highlights of the course include:

• Administrative Supervision
  • The risk assessment
  • IA registration
  • Custody of client assets
  • afeguarding client data
• Adviser Activities Supervision
  • Personal trading and the Code of Ethics rule
  • Conflicts of interest
  • Performance advertising
  • Political contributions
• Adviser Trading Practices Supervision
  • Portfolio management
  • Best execution
  • Valuation of securities
  • Trade allocations

For a more detailed explanation of Risk-Based IA Supervision, contact your sales representative, or sales@firesolutions.com.

A link to our catalog outlining our 2011 Firm Element CE, Annual Compliance Meeting topics, Insurance CE, CFP, and Securities Licensing courses is available below.

For a copy of the catalog click here.

Other Key Updates

In 2010, we added 34 new courses to the FIRE Solutions catalog, including the full line of FINRA eLearning courses. We've added 25 more in 2011. Course descriptions are available in our catalog.

For more info, contact Eric Sternbach at esternbach@firesolutions.com