Important Compliance Concerns for 2025
VIGILANT INSIGHTS
Introduction
As compliance departments prepare for 2025, there is much discussion about how compliance leaders can continue to look for gaps in their policies and procedures.
Enforcements related to Artificial Intelligence (“AI”), Recordkeeping (Off-Channel Communications), and general Marketing Rule violations have Firms trying to discern what SEC priorities relate to their programs.
Unknown errors are sometimes the costliest, so we will highlight below some important considerations in relation to AI, Off-Channel Communications, and the Marketing Rule.
2025 Key Compliance Concerns
- AI
- Vendors may integrate AI into the services they are providing, it is vital to assess exactly how AI has access to client information and other critical data.
- Employees may utilize AI in less-obvious ways on personal devices, or in content creation that may seem harmless, but without understanding the cybersecurity implications or the possibility of error with AI an employee may make your Firm vulnerable.
- Off-Channel Communication
- While certain communications may initially be allowed “off-channel”, such as a meeting confirmations, these channels can quickly enter gray areas where record maintenance is crucial.
- Employees may initiate communication on personal devices that initially would be outside the recordkeeping rule, but as the conversation evolves communication would require archiving.
- Firms must consistently train employees on their communication policies and ensure that their policies and procedures leave no room for gray areas. Many Firms require employees to screenshot and email any conversation on a personal device if there is an accidental discussion of any work-related topic.
- Marketing Rule
- Hypothetical performance cannot be provided to a general audience, any hypothetical performance must consider the likelihood the recipient’s situation will be similar to the assumptions of the hypothetical.
- Third-Party awards and rankings have specific required disclosures, and there can be no material omissions when describing the award/ranking.
- The use of testimonials, especially from social media influencers, warrants a higher level of scrutiny from compliance professionals; the penalties related to the misuse of influencers and other endorsements can be substantial.
Vigilant’s Conclusion
As your Firm prepares for 2025, work with Vigilant to help decrease your Firm’s exposure to regulatory headaches.
We offer numerous solutions that can be tailored to the current needs of your business. Mock SEC Exams and Gap Analysis are two excellent tools that we can implement as your compliance partners to evaluate the effectiveness of your program through the eyes of a regulator.
Reach out to us today for any questions or concerns you might have.