Compliance policies and procedures for variable products

Until 2003, there was no specific provision under the Investment Company Act requiring an investment company, including registered separate accounts offering variable products (separate accounts), to create and maintain a formal compliance program. That changed with the adoption of Rule 38a-1 in Dec...

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Bibliographic Details
Published in:The Investment Lawyer 2004-09, Vol.11 (9), p.15
Main Author: Kirsch, Clifford
Format: Article
Language:English
Subjects:
Accounting
Annual reports
Compliance
Directors
Federal legislation
Interpretation and construction
Investment companies
Laws, regulations and rules
Portfolio management
Provisions
Regulation of financial institutions
Scandals
Securities law
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Summary:Until 2003, there was no specific provision under the Investment Company Act requiring an investment company, including registered separate accounts offering variable products (separate accounts), to create and maintain a formal compliance program. That changed with the adoption of Rule 38a-1 in December 2003. Rule 38a-1 requires a separate account to adopt and implement written policies and procedures. The written policies and procedures must be reasonably designed to prevent violation of the federal securities laws by the separate account. The SEC notes in its Adopting Release that the written compliance polices and procedures should be designed to prevent, detect, and promptly correct violations. By its reference to detection, the SEC notes that an effective compliance program will have a component that tests and analyzes information and trends on a regular basis.
ISSN:1075-4512