Chief Compliance Officer (CCO)

Vigilant’s Outsourced CCO Solutions

Vigilant, a full-service Investment Management Solutions Firm is a premier provider of Compliance Outsourcing Solutions. We assist firms by:

• Collecting compliance information and data from your team stakeholders and internal/external systems
• Assisting with compliance reporting (to meet both internal and external requirements)
• Checking business systems, operations and processes to ensure compliance
• Performing analysis for compliance operations
• Organizing and presenting formal, scheduled compliance reviews
• Preparing reports for the Board of Directors and Senior Management Teams
• Assisting with personalized compliance needs
• Addressing compliance issues resulting from overseas operations or offerings
• Offering ongoing compliance education for your firm
• Drafting and updating compliance policies and manuals as needed
• Outsourcing the position of the Chief Compliance Officer (CCO) or other positions
• Filing notice filings and other applicable filings
• Reviewing all marketing materials, such as social media platforms for compliance
• Drafting a compliance and regulatory calendars
• Creating and storing documentation required for compliance
• Conducting risk assessments
• Auditing (or offering mock audits) to identify and rectify compliance concerns
• Offering ongoing compliance consulting and support

Why Do You Need a Compliance Program?

There are many reasons why you may need a compliance program at your firm. One of the most compelling is the current regulatory environment. Regulations affecting transparency, marketing and other arenas change frequently, and your firm may need to stay compliant with current changes in a number of rules, including SEC regulations, state requirements and:

• The Dodd-Frank Wall Street Reform Act. Passed in 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act provides stronger oversight for larger banks and financial firms. Under these regulations, large banks and some financial firms must have plans in case they fail economically, and they must abide by stronger demands for clarity.
• The Foreign Account Tax Compliance Act. This 2010 law requires US citizens to annually report non-US accounts to the Financial Crimes Enforcement Network (FINCEN). This act requires non-US banks and financial firms to agree with the IRS to seek out possible US persons with open accounts and turn over information about these individuals. If your firm has non-US accounts or operations overseas or if you are a financial services provider in non-US countries as well as domestically, you need to understand what information you can and cannot share, so you can honor both IRS requirements and client privacy expectations.
• The Investment Act of 1940. This 1940 act set forth by Congress regulates the modern hedge fund, mutual fund, and exchange traded fund (ETF) industries. Congress requires investment company’s registration and regulates the product offerings issued by investment companies in the public market. The Investment Company Act of 1940 primarily focuses on the regulatory framework for retail investment products.
• The Investment Company Act of 1940. This regulation enacted in 1940 helped set forth the modern hedge fund, mutual fund, and exchange traded fund (ETF) industries. This act created by Congress requires investment company’s registration and regulates the produce offerings of investment companies offered in the public market.
• The Markets in Financial Instruments Directive II. Enacted in 2014, this EU regulation requires firms offering investment services and activities to improve transparency and comply with new reporting and operations rules. If you have operations in Europe, you may need to stay aware of current reforms to this directive.
• The Investment Advisers Act. Registered Investment Advisers (RIAs) and Investment Adviser Representatives (IARs) need to comply with the Investment Advisers Act, Rule 206(4)-7, which requires a written compliance policy. This act also requires RIAs and IARs to have a Chief Compliance Officer (CCO) in place to enforce the policies developed.

If you are a firm in the financial sector, you need a strong compliance process to ensure you meet regulatory mandates and additional rules. Be sure you can prove your commitment to compliance, by investing in your compliance department.

If any of these directives, regulations, or situations affect you, consider an internal or outsourced compliance program. Vigilant can help your firm navigate the complex rules and regulations that many firms face. Vigilant’s outsourced compliance solutions range from CCO outsourcing to CCO consulting or general consulting on your existing compliance efforts.

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Insourcing vs Outsourcing Compliance: Why Do Companies Choose to Outsource Compliance?

Due to regulations or industry best practices, some firms cannot outsource compliance, especially in situations where sensitive data is involved. Companies sometimes choose in-house compliance because they want more control of their processes and strategies. Regardless of whom you hire, your firm is ultimately the one responsible — and you cannot pass on liability or responsibility, so working with a strong company such as Vigilant can ensure your security and peace of mind.

Outsourcing your compliance services means a policy will be put in place to properly secure private data. Outsourcing can also instill multiple checkpoints so you stay compliant and avoid SEC, FINRA and CFTC penalties. For all these reasons, choosing the right compliance professionals – such as the ones at Vigilant − is important.

Many companies choose partial or full outsourcing. Why is outsourcing important? Regulatory compliance outsourcing with a trusted service provider such as Vigilant offers several advantages:

• You can maximize your resources. More of your employees will be available for other projects if you outsource.
• Your compliance process stays up to date. When you outsource, you are working with a dedicated team who will train and update knowledge on their own time. You will not need to worry about ongoing training, and the professionals who focus on compliance will oversee your program.
• You can tailor your compliance services to meet your needs. You can select services and team members you want supporting your compliance program.
• You can outsource all or part of your compliance needs. Many people consider outsourcing an all-or-nothing proposition, but you can actually choose to outsource only specific functions or positions in your compliance program. If you are a larger firm, for example, you can use outsourcing to support an in-house compliance process or team. Outsourced personnel can handle mock audits, assessments, filings or other tasks. For mid-sized and smaller firms, full outsourcing can replace the need for in-house staff.
• You can receive end-to-end support. A company such as Vigilant can support your firm from assessment of your compliance program all the way to reporting and correction processes. The one-stop approach reduces time investment and effort expended on finding new service providers for each stage of the compliance process.
• You can reduce the onus of management. With an in-house team, employees aren’t always available due to sickness or vacation days. Outsourcing lets you work with a team that is always available. If there is a concern, you can simply address the firm where the professional works.
• You can protect yourself legally. Your firm can create an agreement to outline what will happen if a provider fails to offer a high standard of service. If a service provider commits egregious errors, you may have a claim in some situations. With an in-house employee or team, you may have less recourse in the case of negligence.
• You can get an independent view. Even if you have an in-house CCO, he or she may benefit from the independent review of an outside professional with extensive experience in compliance engagements. Outsourcing means you can bring in a disinterested party familiar with securities regulators. This individual may be able to detect gaps or omissions in your compliance strategy.
• You can show adherence to SEC regulations. Hiring a qualified compliance service and outsourcing some or all of your compliance program can help establish your firm, showing you’re committed to adhering to the rules. In many SEC rulings, the SEC cites lack of proper compliance programs as a key reason for violations. Outsourcing allows you to work with qualified professionals who can develop and work to enforce a defensive compliance program.
• You benefit from experienced professionals. A team of professionals not only offers expertise — they also offer depth of experience. When you outsource, you have the advantage of working with professionals who are familiar with many firms and industries — not just yours. Outsourcing also allows a team to complement their strengths and combine different skills to bring you the service you need.

Outsourcing compliance is not without its risks. You are entrusting another company with your financial and operational information. This information is only as secure as the service provider’s weakest link. In addition, a service provider can only help you avoid compliance issues if they understand the industry and if you provide them with the data they need to do the work.

Despite these considerations, you might want to consider outsourcing compliance if you:

• Struggle to find in-house talent. Compliance requires legal knowledge, compliance expertise, operations experience, business acumen, process management expertise, project management experience and other abilities. Finding a team with these qualities may be difficult at your firm, especially if your firm is midsize. If you outsource, however, you can acquire a team with the right skills.
• Have budgetary concerns. In-house compliance can mean you’re paying for ongoing training, and you may need to consider attrition costs as well. Outsourcing allows you to compare providers and costs. It also ensures you will not need to pay for ongoing training and additional costs. Outsourcing can help manage cash flow by reducing a fixed cost and eliminating the commitment of hiring a dedicated compliance team. With outsourcing, you can scale resources as required.
• Have not updated your compliance program in some time. Your requirements will change as your firm changes. If you are subject to a SEC exam or other reviews, examiners will consider whether you have updated your compliance policies to reflect business changes. Outsourcing lets you enjoy just-in-time staffing models, so when you make adjustments in your firm, you can work with outsourced staff members to update your written compliance policies. As your firm evolves, service providers can also support you as you work to implement your new compliance processes.
• You are leery of investing in needed technology for compliance. Whether you need secure servers or specialized encrypted technology, compliance may require investment in technology. With outsourcing, need to take additional steps to ensure any company you work with is deeply committed to security and does not expose you to unneeded risks. By outsourcing, you can get the right technology without making costly mistakes. Professionals can advise you as to which technology is required for compliance.
• You have global compliance issues. Global compliance can mean you need to consider not only local — but also international — regulations and directives. Staying up-to-date with policy and rule changes around the world can be a full-time job, especially if you have operations in multiple countries. Outsourcing compliance means you can work with team members who understand the regulatory climate in different regions, helping you stay up to date. When running an international operation, you may also occasionally encounter regulations creating logistical problems. Legal analysis by compliance professionals can help you find the solutions you need when compliance rules in different regions seemingly require you to take contradictory or opposite steps.
• Your compliance processes are not optimal. If you face challenges with your current compliance processes, it may be beneficial to discuss your concerns with Vigilant. Outsourcing alone may not solve the problem, especially if there is an underlying reporting or process issue at play. Vigilant may be able to help you hone in on which areas would benefit from adjustments, so your processes work better when you decide to outsource.
• You struggle with the management of your compliance program. Compliance is a needed but non-revenue-generating business function. Like any part of your firm, it requires ongoing training, investment, management and resources. You need to customize your compliance program for your firm and conduct regular testing and reviews. Adequate records must also be kept. All these tasks and concerns may detract from revenue-generating parts of your business, and outsourcing compliance ensures there is one less issue you need to focus on, freeing you to work on other parts of your firm.

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What makes Vigilant different?

• Vigilant offers personalized solutions to meet the individual needs of firms. Risk mitigation consultations, assessments and examinations help target those compliance areas requiring attention, while also maximizing resources.

• Vigilant can offer outsourcing solutions for part or all of your compliance program, and we can work to make your resources available, so you can focus on serving clients rather than chasing regulatory changes.

• Vigilant understands the concerns about the risks of outsourcing compliance, and our team takes these concerns seriously. Vigilant is a data security and client privacy leverage outsourced IT vendor, reducing the risks to clients. The team follows IT best practices to ensure security of all sensitive and client data.

• Employees at Vigilant will view your firm’s data, so our employees sign NDAs and pass thorough background checks. In addition, they are W-2 employees loyal to the company. Rather than hiring 1099 consultants, Vigilant hires, screens, trains and retains the best permanent staff possible. By building a quality workforce, Vigilant ensures you work with a professional team dedicated to your privacy and security.

• Vigilant uses quality control reviews and peer reviews to maintain oversight of employees.

• Vigilant uses on-site reviews and VPN Access to connect to client systems in the most secure and convenient way possible. With a clean regulatory history and a highly trained and qualified group of professionals, Vigilant is poised to serve all clientele across the finance industries.

Vigilant offers a host of personalized and customizable compliance outsourcing and related solutions, including:

• Investment Adviser Compliance Solutions
• Investment Adviser Training
• Mutual Fund Compliance Solutions
• Compliance Program Support for Private Equity and Hedge Funds
• Broker Dealer Compliance Solutions
• Cybersecurity Solutions
• IT Security Assessments
• SEC Data Privacy Compliance Solutions
• Penetration Testing
• RIA Registration
• Mock SEC Exams
• Consulting Solutions

Vigilant also offers end-to-end and custom solutions, so if you need a compliance program and ongoing support, professionals on the team can review your needs and create a solution to keep you compliant. By staying compliant, you can focus on providing financial solutions to your clients. Since the experts at Vigilant focus on the financial sector, you can rest assured they understand the unique needs of your organization and are up to date about current regulatory and legal environments in your industry.

With 9260 mutual funds in the United States worth $15.65 trillion, mutual funds are big business. If your firm is in this or any financial sector, be aware of increasingly regulatory environments. Compliance is more important than ever before — and penalties for violations are harsher. Outsourcing is one solution that can help you avoid SEC, FINRA, CFTC and other regulatory violations. Whether you are interested in outsourcing compliance officers or need to outsource specific compliance needs, contact Vigilant for a consultation.

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