F10.RCC.WSP/COE (SEC REGISTERED - SELF-CUSTOMIZED, REGULATOR SPECIFIC)
RIA COMPLIANCE CONSULTANTS, INC.
COMPLIANCE SERVICES AGREEMENT
WSP/COE (SEC REGISTERED - SELF-CUSTOMIZED, REGULATOR SPECIFIC)
This Compliance Services Agreement, which includes and incorporates the attached schedules and/or addendums, (the "Agreement") is between RIA Compliance Consultants, Inc., a Nebraska corporation located at 6910 Pacific Street, Suite 102, Omaha, Nebraska 68106 ("RCC" or “RIA Compliance Consultants”), and investment adviser as identified below (the "Client").
Section 1. Scope of Engagement & Compliance Services Are Limited
This scope of this engagement and the compliance services (“Compliance Services”) available from RCC during the Agreement Period are limited as described in this Section.
The term “Securities Regulator” as used in this Agreement refers to the primary U.S. securities regulator of Client as an investment adviser. RCC does not provide any assistance with or services for compliance requirements of foreign securities regulators.
Client and RCC will agree mutually upon a timeline which reasonably distributes the work and/or tools associated with the Compliance Services during the term of the Agreement. In the event Client would like to modify the Compliance Services listed after execution of this Agreement, a written request must be provided to RCC. Changes to the Compliance Services listed are contingent upon the written agreement of both RCC and Client.
RIA Express – Written Supervisory Procedures & Code of Ethics (Self-Customized) - During each Service Period, upon Client’s request RCC will provide Client with one-time access to RCC’s electronic authoring wizard, RIA Express – Manual Drafter, for the purpose of creating one (1) set of customized, written supervisory procedures and code of ethics (“Self-Customized, Regulator Specific WSP/CoE”).
Client will complete a detailed questionnaire about Client’s investment advisory personnel, business model, procedures and practices. The answers provided by Client will be used by RCC’s electronic authoring wizard to create for Client a Self-Customized, Regulator Specific WSP/CoE as it relates to the applicable topics listed below. (Client must complete the questionnaire and download the WSP/CoE file within 180 days of RCC issuing Client with a guest login to RIA Express – Manual Drafter.) This Self-Customized, Regulator Specific WSP/CoE is customized by RCC’s electronic authoring wizard based upon the published investment advisor rules of Client’s Securities Regulator and the answers provided by Client when completing the questionnaire previously referenced. However, due to the frequency of changes in investment adviser rules, RCC offers no guaranty or warranty that the most current rules have been incorporated into the electronic authoring wizard; RCC recommends Client also review the Securities Regulator’s rules.
The Self-Customized, Regulator Specific WSP/CoE will address the following applicable topics: registration and notice filing requirements including representative licensing; investment advisory customer communications (advertising and correspondence); social media and networking websites; best execution; books and records; business continuity and disaster recovery; code of ethics; personal securities transaction and holding reports; investment advisory customer complaints; custody; investment advisory customer directed brokerage; trading practices including soft dollar arrangements; solicitor arrangements; privacy of investment advisory customer information under Regulation S-P; Form ADV disclosures and annual offer; insider trading; proxy voting; political contributions; handling whistleblower complaints; Schedule 13D, 13F, & 13G filings; and foreign customers. RCC’s electronic authoring wizard is not comprehensive; there are certain investments, investing strategies, practices, policies, procedures, business models, outside business activities, conflicts of interest, risks or other variables related to the general topics referenced above which are not addressed by RCC’s electronic authoring wizard. The electronic authoring wizard may also become out of date due to changes in the investment adviser rules of the Securities Regulator.
Client is responsible for reviewing the actual investment adviser rules of the Securities Regulator and also understanding, reviewing, editing/customizing, implementing and updating the final version of the WSP/CoE once Client has received the version prepared by RCC’s electronic authoring wizard. Client acknowledges that this WSP/CoE prepared by RCC’s electronic authoring wizard is not the same as or a substitute for retaining a compliance professional to advise and assist Client regarding Client’s investment adviser compliance program.
RCC will provide Client with access to the following sample forms: annual compliance calendar checklist; books and records documentation log; suggested list of compliance files and reports; code of ethics acknowledgement form; compliance manual acknowledgement form; sample customer privacy policy notice based upon Regulation S-P (and not specific to nor otherwise based upon the requirements of any state privacy and data protection laws); and customer privacy notice request/receipt log.
Client's Initials
Section 2. Fees & Term
RCC's fees, expenses, method of payments, billing practices and term for this engagement are described in this Section and the Minimum Fixed Fee and Hourly Rate Schedule attached hereto and incorporated herein.
Term
The term of service (“Service Period”) for this engagement is the 90-day period following the execution of this Agreement and payment of the Fixed Fee unless mutually agreed otherwise by the parties in writing.
Fixed Fee
The fixed fee is $995 (“Fixed Fee”) for the Compliance Services under this Agreement. The Fixed Fee will be due in advance upon execution of this Agreement. Upon providing Client access or a link to the electronic wizard, RIA Express – Manual Drafter, the Fixed Fee will be considered earned by RCC. The Fixed Fee is non-refundable even if Client did not utilize the electronic wizard.
The Fixed Fee is limited solely to compensating RCC for providing the Compliance Services under this Agreement. There are additional service fees charged by RCC if Client requests RCC to perform tasks, provide services or prepare documents not included in the Compliance Services under this Agreement.
The Compliance Services under this Agreement do not include any WSP/CoE Hours to assist Client with the customization of the WSP/CoE beyond the version created by the electronic authoring wizard. If Client requests a RCC consultant to assist with customizing the WSP/CoE beyond the version created by the electronic wizard, RCC will require Client to pay a retainer in advance (“subsequent retainer amount”) and will charge Client an hourly fee at the RCC consultant’s standard hourly billing rate and also subject to our Minimum Fixed Fee Schedule.
Retainer
If Client requests a RCC consultant to assist with customizing the WSP/CoE beyond the version created by the electronic wizard, Client will need to make a retainer payment in a mutually agreeable amount in order for RCC to continue to work with Client. In the event that the amount that Client owes RCC for such fees and expenses exceeds the retainer payment(s), Client will be required to pay this outstanding amount within 30 days of the presentment of the invoice.
Any amount paid by Client to RCC for the subsequent retainer is non-refundable even if the fees and/or expenses actually incurred for Compliance Services do not exceed the retainer payment amount(s). A retainer payment must be used by Client for the fees and expenses incurred due to Compliance Services provided within 12 months of such payment. A retainer payment cannot be applied against new fees and/or expenses incurred at RCC after the 12-month anniversary of the retainer payment. Client is solely responsible for monitoring the 12-month anniversary of each retainer payment and determining whether to utilize RCC for additional services within this 12-month period.
RCC does not utilize a client trust account, and retainer payments made to RCC are not maintained in a separate account for the benefit of Client; a retainer payment is a general asset of RCC upon RCC’s receipt of such retainer payment.
Sales Tax
To the extent that an applicable governmental jurisdiction requires the payment of sales tax for the services described in this Agreement, Client authorizes RCC to charge Client for such sales tax in addition to and separate from any Fixed Fee owed to RCC.
Payment via Credit Card
RCC can accept payment via credit card or ACH withdrawal. Client agrees that if Client has a dispute with RCC, Client will not raise this dispute with Client's credit card company/ACH processor or seek adjudication of any dispute with RCC through or by Client's credit card company/ACH processor. Client agrees that if Client pays the Fixed Fee and/or the other applicable expenses and sales/use taxes via credit card or ACH, Client will not instruct Client's credit card company, ACH processor or bank to reverse such charges. If Client cancels the credit card or bank account on file with RCC or the credit card on file expires during the duration of the Agreement and subsequent payments are still due, Client will provide RCC with another valid credit card or bank account to use for payment of the Fixed Fee and other applicable expenses or sales/use taxes.
Invoice Delivery
RCC will deliver the invoice electronically to Client, and Client will be responsible for paying the outstanding amount, if any, within 30 days of presentment of invoice.
Section 3. Client’s Duties
(a) Client recognizes the value and usefulness of the Compliance Services of RCC are dependent upon the accuracy and completeness of the information provided by Client to RCC. Client will provide RCC with all requested information and documents that RCC may reasonably request in order to prepare any mutually agreed upon investment advisor documents and perform RCC’s Compliance Services. Client will be truthful and accurate in all disclosures to RCC. Client will affirmatively disclose to RCC (without RCC making a specific request) any material information related to the Compliance Services being provided to Client. Depending upon the particular services being provided to Client, the following are examples of material information which should be shared with RCC: (i) any conflicts of interest of Client, Client’s supervised persons and Client’s parent company/owner, subsidiaries, and affiliates; (ii) any deficiencies or violations (known to Client or Client’s executives, staff or investment adviser representatives) of Client’s code of ethics or supervisory procedures and policies; (iii) any deficiencies or violations (known to Client or Client’s executives, staff or investment adviser representatives) of applicable rules, regulations or laws; (iv) any current or prior inquiries or investigations by Client regarding violations of Client’s code of ethics or supervisory procedures and policies, any rules, regulations and laws, or industry practices; (v) any current or prior customer disputes, arbitrations or lawsuits related to Client or Client’s executives, staff or investment adviser representatives; and (vi) any regulatory or criminal inquires, investigations or proceedings regarding Client or Client’s executives, staff or investment adviser representatives. RCC will not be responsible for the verification of the information and documentation provided by Client. RCC will not be responsible for verifying the accuracy or truthfulness of any information, document or statements provided by the officers, staff, investment adviser representatives or outside professionals (such as attorneys and accountants) of Client.
(b) It is Client’s responsibility to fully disclose in advance to RCC all material facts related to Client’s investment advisor. Moreover, it is Client’s duty to review, understand, add, edit and revise if necessary, implement and update any documents (e.g., disclosure document, policies, procedures, checklists and code of ethics) provided or prepared by RCC. To the extent that Compliance Services involve written supervisory procedures or code of ethics, Client understands that the template and customized written supervisory policies and procedures and code of ethics provided or prepared by RCC are based generally upon the published investment adviser rules of Securities Regulator but should not be considered as exhaustive, comprehensive or definitive list of Client’s obligations under the investment adviser laws and rules; the template and customized written supervisory policies and procedures and code of ethics provided or prepared by RCC may not necessarily address every topic, policy or procedure that may need to be covered by Client. RCC offers no warranty or guaranty that the written supervisory procedures or code of ethics provided by RCC is current or addresses all topics, conflicts of interest, rules, policies and procedures required by Securities Regulator. RCC strongly recommends that Client review all of the specific statutes and regulations of Securities Regulator for an investment adviser. Any template and customized written supervisory policies and procedures and code of ethics provided or prepared by RCC are not a substitute for Client fully understanding the applicable investment adviser laws and rules. The written supervisory policies and procedures and code of ethics should be treated by Client as a living and breathing document that should be regularly referred to and updated by Client. In other words, Client should not place its written supervisory policies and procedures and code of ethics on a shelf and let it gather dust. Client understands that due to changes of investment adviser laws and rules, Client’s written supervisory policies and procedures or code of ethics may need to be updated. Client acknowledges that RCC is not responsible under this Agreement for notifying Client of changes to the investment advisor laws and rules, and it will be Client’s duty to update the written supervisory policies and procedures and code of ethics.
(c) Upon initial presentment and prior to using with a securities regulator, investment advisory customers or the public, Client will thoroughly review all investment advisor documents prepared by RCC to ensure that such documents are factually accurate and consistent with Client’s actual practices. Client will ensure that all documents have been fully customized to be consistent with Client's actual business model. Additionally, Client will ensure that proposed documents make full and fair disclosure of all material facts necessary for informed decision making by investors, especially where a possible conflict of interest is involved, irrespective of whether such disclosure is called for by a specific item of a regulatory document. Client will immediately advise RCC of any inaccuracies, omissions of material facts or inconsistencies that Client finds in such documents. If Client does not understand any particular disclosure or term within such documents, Client will immediately inform RCC. Client understands that by providing any document prepared by RCC to customers, securities regulators, and the general public, Client is acknowledging the accuracy of the information contained in all such documents prepared by RCC and used by Client. It will be Client’s responsibility to fully review, understand and resolve the deficiencies identified by RCC. RCC will not be responsible under the Compliance Service of this Agreement for drafting or implementing any recommendations identified during the assessments of the investment advisory documents and compliance program.
(d) Client will provide detailed information to RCC regarding, but not necessarily limited to, Client’s preferred business model, investment advisory services, fee structure, and custodian or money managers. Although RCC at its discretion may discuss various options or offer examples regarding how the Client could structure its investment advisory services, Client understands RCC’s Compliance Services are limited to compliance matters.
(e) Client will be responsible for designating a principal or employee of Client to serve as the administrator of Client’s IARD/Web CRD account. If Client desires RCC to file documents (approved by Client) via IARD or CRD systems, Client will authorize RCC to serve as a user (non-administrator) of Client’s IARD/Web CRD account.
(f) Client will be solely responsible for funding the IARD/Web CRD account.
(g) Client understands that the Compliance Services do not include RCC verifying the existence and/or safekeeping of the assets held by Client or a third-party custodian. The Compliance Services will not include RCC contacting investment advisory customers of Client.
(h) Client will designate at least one individual at Client’s firm to receive, review, and take action on RCC’s newsletters, blog posts on RCC’s website and other electronic notices sent by RCC via email or RCC’s customer portal. Client acknowledges that such notices will include important information that could require Client’s immediate action. RCC is not responsible for Client’s failure to read, understand, or respond to important notices and communications sent by RCC.
(i) Client understands that the Compliance Services do not include RCC providing any evaluation of the suitability or risk of asset allocations, investment and trading strategies or investment recommendations made by Client. The Compliance Services do not include an investigation or analysis of whether Client has an adequate basis for recommending/selecting an investment, whether the investment advisory customer is over concentrated in the investment or asset class, whether a customer is over-leveraged, whether the time horizon of the investment is consistent with the investment advisory customer’s time horizon, whether a particular investment or portfolio is too volatile for a customer and whether such investment is in the investment advisory customer’s best interest. Likewise, the Compliance Services do not include a review or analysis of the pre-approval or exception report systems utilized by Client to supervise the investment recommendations and selections made by its supervised persons. Additionally, RCC does not conduct due diligence of investment products, securities issuers, fund managers, other investment advisors, qualified custodians or other vendors utilized by Client. RCC does not offer investment advice.
(j) Client understands that an actual examination of Client’s investment advisor by a securities regulator is likely to be more staff intensive and broader in scope than the Compliance Service offered by RCC, and consequently, a securities regulator is highly likely to detect deficiencies and violations, which were not uncovered during assessment of Client’s investment advisory documents or compliance program as part of the Compliance Service.
(k) Client will retain legal counsel to prepare or review Client's investment advisory customer agreement. RCC will not provide Client with any sample investment advisory customer agreements and will not review any existing investment advisory customer agreements presented by Client.
(l) Fees paid to RCC will never cover any of the following: Client’s expense associated with acquiring a surety bond (if required by the Securities Regulator); the costs of registration, examination, licensing and user fees charged by the applicable Securities Regulators and IARD system; and the fees charged by other professionals, such as an accountant or lawyer, hired by Client.
(m) To the extent that Client requests RCC to prepare and/or file the Form ADV to register or notice file Client’s investment adviser or the Form U4 or Form U5 to register/de-register an individual as an investment adviser representative of Client’s investment adviser, Client is solely responsible for verifying that RCC in fact prepared and filed such document with the applicable securities regulator. Since failure to register or notice file can result in an adverse regulatory enforcement proceeding, Client cannot merely rely upon RCC to prepare or file such document without further verification by Client that such request has been completed.
(n) It is Client’s sole responsibility to monitor whether a prospective investment adviser representative’s securities examination is approaching the applicable state’s expiration date and whether the Form U4 has been filed before such expiration date. Likewise, if Client’s investment adviser representative has marked on his or her Form U4 that he or she is utilizing a professional designation in lieu of a securities examination as the pre-requisite, Client is solely responsible for ensuring that such professional designation is continuously in good standing. RCC will not be responsible for verifying or monitoring whether a securities examination is approaching expiration or a professional designation for an investment adviser representative of Client is not in good standing.
(o) Client will follow and comply with all laws and rules of the applicable securities regulators.
Section 4. Nature of Compliance Consulting Relationship
RCC is a compliance consulting and services firm. Although RCC has an affiliate that is a law firm known as Bryan Hill Law (“BHL”) and RCC may have an individual on its staff that is also licensed as an attorney offering legal services in a completely separate capacity and through BHL, RCC is not a law firm or an attorney and does not provide legal services. RCC is not serving as Client’s attorney.
In general, a licensed attorney is regulated by his or her state supreme court through the use of rules of professional conduct and ethical requirements, minimum education and examination requirements, mandatory professional liability insurance coverage, client trust account procedures and trust account audits and a disciplinary process. Unlike a client of an attorney, a client of RCC will not receive the advantages of such regulatory oversight since the compliance consultant occupation is not licensed by state government.
A compliance consulting relationship with RCC is not provided those legal and professional protections that normally exist under an attorney-client relationship such as the following: (i) privileged communication between an attorney and client; (ii) the requirement for an attorney to use a client trust account for safekeeping of legal fees paid in advance by a client; (iii) the requirement for an attorney to maintain professional liability insurance; or (iv) prohibitions preventing an attorney from having impermissible relationships with clients, representing other persons with conflicting interests, receiving referral fees from third-party vendors, or prospectively limiting liability for malpractice through contractual provisions in a client agreement.
Unlike an attorney, RCC does not utilize a client trust account for the retainer or consulting fees paid in advance by a client, does not follow trust accounting procedures (and is not supervised by a regulator or third-party) for such retainer or consulting fees paid in advance, and either prohibits or severely limits the circumstances and time period for refunds, and consequently this arrangement with RCC lacks the safeguards associated with an attorney's client trust account. Due to limitations in the software used by RCC to prepare invoices, there may be references located on requests and/or invoices to a “trust” account; however, Client acknowledges that despite any such references, RCC does not utilize a client trust account.
Unlike an attorney, RCC is not fiduciary. Unlike an attorney, RCC is not required to maintain professional liability insurance. Unlike an attorney, RCC is utilizing several contractual provisions within this Agreement in which Client waives any and all liability for certain claims and agrees to limit the extent of RCC’s liability for malpractice for other claims. Unlike an attorney, RCC receives referral fees from vendors participating in the Strategic Alliance Program and other referral programs of RCC.
If RCC provides Client with comments regarding an investment advisory agreement or other agreement, this does not constitute and should not be deemed as legal advice. Such comments provided by RCC are not a substitute for a review, revision and approval of Client's investment advisory agreement or other agreement by an attorney in Client's jurisdiction. Client understands that any comments provided by RCC regarding Client's investment advisory agreement or other agreement have not been prepared by an attorney to comply with the laws of Client's local jurisdiction. Client acknowledges that by relying upon comments provided by RCC without local legal counsel's review and approval, Client is undertaking the risk that Client's investment advisory agreement or other agreement is not legally enforceable and may fail to best protect Client's interests.
In the event that a securities regulator initiates an enforcement proceeding against Client claiming Client violated applicable law, Client will need to retain legal counsel to represent Client before the securities regulator. Although RCC may serve as an expert resource to Client and Client's legal counsel regarding industry practices, RCC is not a substitute for retaining appropriate legal counsel.
There is no guarantee that consulting work performed by RCC will be favorably received by the applicable securities regulators.
RCC strongly recommends that prior to executing this Agreement, Client should retain an attorney, who is not affiliated with RCC, to review and provide Client with independent advice regarding the terms of this Agreement.
Section 5. Non-Exclusive Relationship with RCC
Client does not have an exclusive client relationship with RCC. RCC may have other clients receiving services from RCC which are competitors of Client and/or include former supervised persons of Client. RCC may also have other clients that have a business alliance, broker-dealer or vendor relationship with Client or Client’s associated persons.
Section 6. Strategic Alliance Program & Other Referral Arrangements
RCC has established the Strategic Alliance Program and other referral arrangements whereby RCC has agreed to publicize the services and/or products of Strategic Alliance members and certain third-party vendors and refer or introduce such Strategic Alliance members and third-party vendors to Client. Depending upon the third-party vendor, Client may receive discounts or special offers from the Strategic Alliance member or third-party vendor. RCC receives compensation from each Strategic Alliance member and third-party vendor referred or introduced by RCC which may include an annual fixed fee and/or a percentage of the fee charged by the third-party vendor to Client. This creates a conflict of interest for RCC and biases the objectivity of RCC and its employees when referring, introducing, referencing or otherwise discussing such Strategic Alliance Members and third-party vendors. Client is under no obligation to utilize the services and/or products of Strategic Alliance members and other third-party vendors referred or introduced to Client by RCC.
RCC is not affiliated with the Strategic Alliance members and any other third-party vendors and does not control or supervise the services or products of the Strategic Alliance member or other third-party vendors. Client acknowledges that RCC’s referral, introduction, discussion or other reference to these Strategic Alliance members or third-party vendors does not mean that RCC has performed any level of due diligence on the services or products of the Strategic Alliance members or other third-party vendors referred or introduced by RCC. Client acknowledges and agrees that RCC is not liable for any damages that result to Client from the actions or inactions of a Strategic Alliance member or third-party vendor referred or introduced by RCC.
RCC is not making any recommendation to Client about whether Client should utilize the services or products of a Strategic Alliance member or other third-party vendor. Client acknowledges that Client’s determination to use the services or products of a Strategic Alliance member or any other third-party vendor is an important decision and should not be based upon a third-party vendor’s participation in the Strategic Alliance Program or referral, introduction or reference by RCC. As with any service provider, RCC recommends that Client perform its own due diligence on each Strategic Alliance member or third-party vendor referred or introduced by RCC. Before engaging the services or utilizing the product of a Strategic Alliance member or third-party vendor referred or introduced by RCC, Client agrees to perform its own independent investigation and evaluation to make sure that the applicable service or product of the Strategic Alliance member or third-party vendor is the best fit for Client and meets Client’s performance requirements and regulatory and cybersecurity obligations.
Section 7. Non-Solicit of RCC Employees
Without the written consent of the president of RCC, during the term of this Agreement and for a period of twelve months after this Agreement's termination, Client and Client's affiliates will not engage in any of the following activities: (1) directly or indirectly solicit, contact, negotiate with, or in any manner attempt to induce any individual, who is currently employed by RCC and personally works or worked with Client while affiliated with RCC, to terminate his or her employment with RCC; nor (2) hire or engage any individual, who is currently employed with RCC and personally worked with Client while at RCC, as an employee or a compliance consultant (outside of an engagement through RCC). Under no circumstances will this section prevent a Client from soliciting or hiring a current or former RCC employee, who is licensed as an attorney, to serve as the Client's attorney.
Section 8. Client's Confidential Information
In providing Compliance Services, RCC will acquire information of a confidential nature relating to Client's business activities and its investment advisory customers. RCC hereby agrees to maintain the confidentiality of Client's information and shall not use, publish, or otherwise disclose (except to third-party service providers described below) any such confidential information pertaining to Client without Client’s express written consent or as required by law (e.g. a subpoena from a securities regulator or law enforcement authority).
Client acknowledges that RCC enters into contracts with third-party service providers so that RCC can provide Compliance Services to Client. These third-parties provide services to RCC (via the cloud) such as word processing and document creation software, document storage systems, task and project management software, data management, client relations management (CRM) software, credit card processing and billing, and communications (telephone, email and messages), and consequently such third-party service providers often have access to confidential information of Client.
If Client provides RCC with possession of any investment advisory related document, Client will redact (blackout or remove) at least partially the legal name of each investment advisory customer and any full or complete brokerage account numbers, bank account numbers, policy numbers, credit card numbers, driver's license numbers, passport numbers, visa numbers, social security numbers, tax identification numbers, passwords and dates of birth of investment advisory customers before providing RCC with possession of such document containing this confidential information. For example, if Client intends to provide RCC with a document which includes name of investment advisory customer (e.g., Thomas Andrew Smith) with a full date of birth (01/14/1973), Client will redact or black-out the investment advisory customer’s name to only show “Smith” (or a customer number if utilized by the firm) and date of birth to only show “1973”.
RCC recognizes that Client may be subject to the provisions of the Securities and Exchange Commission's Regulation S-P, or other privacy rules promulgated under the Gramm-Leach-Bliley Act (the "GLBA"). RCC represents that it is a nonaffiliated third-party service provider that is excepted from the notice and opt-out requirements pursuant to the GLBA.
To the extent that Client is utilizing RCC to assist with registering or notice filing as an investment adviser or investment adviser representative, Client authorizes RCC to disclose, as reasonably necessary, confidential information about Client’s business activities to the applicable securities regulators as part of the investment advisor registration process.
Nothing in this Section will diminish or restrict RCC's right, as later described in this Agreement, to use for the benefit of another party any materials that are the same (except for Client's name, CRD number or associated persons' names) as or similar to the materials prepared by RCC for Client under this Agreement.
Section 9. Not Work Made for Hire & Limited, Non-Exclusive License
RCC shall retain sole ownership of the copyright of all materials prepared by RCC under this Agreement. After removing Client’s name, Client’s CRD number and the names of Client’s associated persons, RCC may use the materials prepared by RCC under this Agreement for parties or investment advisors other than Client without any limitations, restrictions or charges to RCC. Under no circumstances shall any materials prepared by RCC pursuant to the Agreement constitute works made for hire under copyright law. Client will execute any necessary forms or papers that RCC considers necessary to secure RCC’s copyright with no charge to RCC.
RCC shall grant Client a limited, non-exclusive license to use the materials prepared by RCC under this Agreement in the following manner and under only these conditions:
Section 10. Not Intended to Detect Fraud
Client understands that RCC is not a fraud examiner and the Compliance Services provided under this Agreement are not intended to detect or prevent fraud including but not limited to inaccurate or false calculation or valuation of assets under management, false statements of the Form ADV, bribery, extortion, identity theft, forgery, misrepresentation, collusion to circumvent internal controls, selling away, unlawful sale of unregistered securities, failure to register as an investment adviser or an investment adviser representative thereof, failure to register as a securities broker-dealer or a registered representative thereof, Ponzi schemes, undisclosed outside business activities, fictitious account(s), inaccurate or false account statement(s) or performance report(s), inaccurate or false fee calculations, a loan from an investment advisory customer, false or inaccurate financial statement, a bribe, misappropriation of confidential information, insider trading, front running investment advisory customer trades, cherry picking profitable trades for personal accounts, misappropriation of limited investment opportunities owed to customers, cybersecurity breach, identity theft, money laundering, wire fraud, unauthorized disbursement, theft, embezzlement, misappropriation or unlawful conversion by Client or Client’s owners, directors, officers, employees, investment adviser representatives, solicitors, custodians, third-party money managers, vendors or outside professionals.
Section 11. Miscellaneous
(a) Counterparts. The parties may execute this Agreement on any number of counterparts, and all of the counterparts taken together shall be deemed to constitute one and the same instrument.
(b) Severability. If any part, term or provision of this Agreement is held to be illegal, in conflict with any law or otherwise invalid, the remaining portion or portions shall be considered severable and not be affected by such determination, and the rights and obligations of the parties shall be construed and enforced as if the Agreement did not contain the particular part, term or provision held to be illegal or invalid.
(c) Force Majeure. In the event either party is unable to perform its obligations under the terms of this Agreement because of acts of God (including fire, flood, tornado, earthquake, storm, hurricane or other natural disaster), terrorism, war, cyberwar, invasion, espionage, cyber espionage, act of foreign enemies, rebellion, strikes, equipment or transmission failure or damage reasonably beyond its control, or other causes reasonably beyond its control, such party shall not be liable for damages to the other party resulting from such failure to perform or otherwise from such causes.
(d) Headings. Section and paragraph headings in this Agreement are included for convenience only and are not to be used to construe or interpret this Agreement.
(e) Representation of Signatories. Each of the undersigned expressly warrants and represents that they have full power and authority to sign this Agreement on behalf of the party indicated and that their signature will bind the party indicated to the terms hereof.
Section 12. Acknowledgements, Disclosures Limitations, Requirements & Terms of Schedules & Addendums
Client has read, understands and agrees to the acknowledgements, representations, disclosures, limitations, requirements, and terms made by RCC to Client within the attached Disclosures, Schedules and Addendums or any RCC revisions of these documents provided to Client.
Section 13. No Third-Party Beneficiary
This Agreement and the Compliance Services provided under this Agreement are for the exclusive benefit of Client. The materials prepared under this Agreement are not provided for the benefit of a third-party such as a broker-dealer, custodian, or investment adviser that has a business relationship with Client or an individual or entity who is a recipient or customer of Client’s investment advisory services.
Section 14. Choice of Law and Venue
This Agreement shall be governed by and construed according to the laws of the State of Nebraska without giving effect to its choice of laws principles. The parties agree that all actions and proceedings arising out of or relating directly or indirectly to this Agreement or any ancillary agreement or any other related obligations shall be litigated solely and exclusively in the state or federal courts located in Omaha, Nebraska.
Section 15. Client Should Independently Evaluate Whether to Hire RCC
Client understands that the determination to use a third-party compliance services provider is an important decision and should not be based solely upon advertisements or self-proclaimed expertise. A description or indication of limitation of RCC’s Compliance Services does not mean that an agency or board has certified RIA Compliance Consultants, Inc. as a specialist or expert in investment advisor compliance. RCC has not been certified by an agency or board as a specialist or expert in investment advisor compliance. Client acknowledges that RCC recommended that Client conduct an independent investigation and evaluation of RCC prior to executing this Agreement.
Section 16. Limitation of Liability
IN NO EVENT WILL RCC'S AGGREGATE LIABILITY TO CLIENT FOR ANY AND ALL CLAIMS RELATING TO THE COMPLIANCE SERVICES PROVIDED UNDER THIS AGREEMENT, WHETHER IN CONTRACT OR NEGLIGENCE, EXCEED THE FEES PAID BY CLIENT FOR THE COMPLIANCE SERVICES PROVIDED UNDER THIS AGREEMENT.
Section 17. Agree to Above Terms of Engagement
The parties hereto agree to the above terms and have caused this Agreement to be executed in their names and on their behalf by and through their duly authorized persons.
Schedule 1 – Disclosures & Compliance Service Limits
The following are important disclosures by RIA Compliance Consultants, Inc. (“RCC”) and limitations related to the service provided by RCC and acknowledgements and representations by Client under this Agreement.
Minimum Fixed Fee & Hourly Rate Schedule
Annual Compliance Program Packages
To the extent that Client executed the engagement agreement for a standard (non-customized) Annual Compliance Program package of RIA Compliance Consultants, Inc. (“RCC”), the following is the Consulting Fee for the 12 month service period for the packages listed below which will be effective upon the annual renewal date of the Annual Compliance Program:
RCC reserves the right to change the annual fee by giving Client 30 days’ notice prior to the annual renewal date of the Annual Compliance Program. Client may cancel the automatic renewal of Annual Compliance Program for a subsequent 12 month service period by providing, written notice to RCC prior to the last day of the current 12 month service period as specified in the executed engagement agreement with RCC.
Sample Forms
To the extent that Client requests a sample form available on RCC’s Online Store for Compliance Tools and Services or requests RCC customize such a sample form, RCC may charge Client the current published price for the sample form (if not available to Client under Client’s current Annual Compliance Program subscription) plus the additional hourly work by RCC’s staff to discuss such form with Client and customize the sample form to Client’s specifications and/or requirements. Client agrees that Client will review and abide by RCC’s published disclosures regarding the sample form limitations before utilizing such sample forms. RCC reserves the right to change the availability under an annual compliance program package and the a la carte fixed fee for sample forms effective immediately with no advance notice to Client.
Hourly Rates
To the extent that Client is subject to an hourly fee arrangement or has exceeded budgeted consulting hours (or is outside the scope of Compliance Services) under a fixed fee arrangement and is currently subject to an hourly fee arrangement with RCC, the following are the current hourly rates of RCC’s staff billed in five-minute increments:
The assignment of a particular staff person of RCC to work on task or project is at RCC's sole discretion and will be based upon availability, skills and expertise of each staff person.
Tasks/Activities Subject to Minimum Fixed Fee
To the extent that Client is subject to an hourly fee arrangement or has exceed budgeted consulting hours (or is outside the scope of Compliance Services) under a fixed fee arrangement and is currently subject to an hourly fee arrangement with RCC and RCC performs a task/activity or set of tasks/activities listed below on the Minimum Fixed Fee Schedule, Client will be charged the greater of the hourly fees incurred using the current hourly rates or the minimum fixed fee listed below on the Minimum Fixed Fee Schedule. RCC reserves the right to add, change and delete the tasks/activities and corresponding fees of the Minimum Fixed Fee Schedule effective immediately upon RCC giving Client notice of applicable additions, changes or deletions.
Investment Adviser Representative Documents
Advertising
Other Registration Documents & Filings
Subsequent Changes to Minimum Fixed Fees & Hourly Rates
RCC reserves the right to raise the minimum fixed fees or hourly rates indicated in the Minimum Fixed Fee & Hourly Rate Schedule after giving the Client a 30-day advance notice of the new minimum fixed fees and hourly rates.
Other Tasks/Activities Not Listed under Tasks/Activities Subject to Minimum Fixed Fee
In addition to the Tasks/Activities Subject to Minimum Fixed Fee, RCC also may offer a fixed fee in lieu of an hourly rate for certain other specific tasks or activities not stated above. Prior to charging a fixed fee which is not already listed under the Tasks/Activities Subject to Minimum Fixed Fee stated above, RCC will provide a quote of the fixed fee in writing for Client's approval prior to beginning of such task/activity.
*Unless RCC advises you in writing to contrary, IARD Renewals Only Service consists of the following: providing an outline of important dates and follow-up reminders throughout the renewal period; retrieving from the CRD system and providing the investment advisory customer with a copy of the CRD Rep Roster Report; providing the investment advisory customer with IARD funding information; retrieve from the IARD system and provide Client with a copy of the Client’s initial and final renewal statements; and monitor Client’s IARD renewal account and to verify that the account is funded in a timely manner, if funding is not credited specific reminders will be provided.
Schedule for Sample Forms
Disclosures & Limitations
To the extent that the Compliance Services of RIA Compliance Consultants, Inc. (“RCC”) under this Agreement includes our sample forms and documents, Client acknowledges and agrees to the following disclosures and limitations:
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The parties hereto agree to the above terms and have caused this Agreement, including all attached Exhibits, Schedules and/or Addendums, to be executed in their names and on their behalf by and through their duly authorized persons.
Client’s Name (Typically Firm):
Name of Client’s Signatory:
Title of Client’s Signatory:
Client’s Address:
Client’s City/State:
Client’s Zip Code:
ACCEPTED BY RIA Compliance Consultants, Inc.
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Your legal name
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Signed by Bryan Hill Signed On: 07/24/2024
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Document Name: F10.RCC.WSP/COE (SEC REGISTERED - SELF-CUSTOMIZED, REGULATOR SPECIFIC)
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