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Is a state registered investment adviser required to maintain written compliance policies and procedures?


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The requirement of whether a state registered investment adviser must maintain written compliance policies and procedures varies from state to state. All investment advisors, without regard to SEC or state registration, are required to establish, maintain and enforce written policies and procedures that are reasonably designed to prevent the misuse of material non-public (“insider”) information. Many states have requirements for state registered investment advisers similar to the SEC’s requirements for federally registered investment advisers regarding written supervisory and compliance policies and procedures. A state registered investment adviser will need to review its state’s investment advisor rules and regulations to make this determination. However, regardless of your investment adviser’s state requirements, the maintenance of supervisory and compliance policies and procedures is a good business practice. It helps to create a strong culture of compliance within your firm, which is something the regulators will analyze when conducting a regulatory examination of your investment adviser.

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