State Registered Investment Advisors. The North American Securities Administrators Association (NASAA) released its first annual report identifying the state registered investment advisor population and related regulatory activities.
This annual report provides some great insight into smaller state registered investment advisors firms. The two main areas of the report that warrant close scrutiny is the 2017 Coordinated Exams Report and the Cybersecurity Checklist for RIA firms.
2017 Coordinated Exams Report
This report provides insight into areas where state registered investment advisors should focus their attention.
The Top 5 Deficiency Categories:
Books & Records – 64.6%
Registration – 54.3%
Contracts – 45.5%
Fees – 27.2%
Custody – 27.2%
Cybersecurity Checklist
In 2017 the state securities examiners reported to NASAA that they found almost 700 cybersecurity related deficiencies during the 1,200 examinations of state registered investment advisors.
The top five Cybersecurity issues noted by the regulators:
- No or inadequate cybersecurity insurance
- No testing for potential cybersecurity vulnerabilities
- Inadequate procedures with securing or limiting access to devices
- Failure to retain an IT or technology consultant
- Inadequate procedures related to hardware/software upgrades
To assist state registered investment advisors, the Cybersecurity and Technology Project group from NASAA created “The NASAA Cybersecurity Checklist for Investment Advisors.” Which is a self-assessment that allows small firms to identify, respond and recover from cybersecurity weaknesses. Click here for the Cybersecurity Checklist!
For a complete copy of NASAA’s first annual report, click here! State registered investment advisors who need assistance with their compliance requirements, contact Registered Advisor Services today for a free consultation.
