Finding A Way.

What Is the Biggest Compliance Concern for Registered Investment Advisers?

hedge fund attorney NYCIf you guessed social media, you are correct! A recent survey conducted by the Investment Adviser Association, ACA Compliance Group, and Old Mutual Asset Management found social media is keeping investment advisers awake at night.

The seventh annual Investment Management Compliance Testing Survey polled 555 compliance professionals. Among the wide variety of topics covered by the survey, which included best execution, pay-to-play, insider trading, gifts and entertainment and testing, social media was the “hottest.”

Overall, 80% of firms have adopted formal written policies concerning social networking, up from 64% in 2011 and 43% in 2010. 54% of firms prohibit the use of social media sites for business purposes, and the same percentage test compliance with the policy. In addition, 52% report that their social media testing has increased since 2010.

The next most commonly cited “hot” compliance topic is insider trading. 74% percent of firms test to detect insider trading, and over 30% have increased their testing since last year.

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