|Compliance Exam Materials
A. Documents required for all investment advisers:
- A copy of the most recent Form ADV, Part 2
and any disclosure document given in conjunction
with or in lieu of Part 2.
- A copy of the standard advisory contracts or
- All promotional brochures, pamphlets, and
other advertising materials furnished to clients or
prospective clients within the past 12 months (e.g.
seminar materials, newsletters, newspaper
advertisements, business cards, letterhead).
- Written supervisory policies and procedures.
- Complete complaint, arbitration and
- Any performance reports, data or graphs that
are currently disseminated to clients or prospective
clients along with the records and work papers
supporting the claims contained therein.
- All accounts, books and internal working
papers that form the basis of any performance or
rates of return that are used in any advertisements.
- A list of all personnel including their
titles, CRD numbers, professional designations, and
- A list of all parties who have been paid
cash referrals during the last three years.
- Records evidencing the offer or delivery of
the IA's disclosure brochure or Part 2 of the ADV,
as well as copies of the disclosure documents
delivered to clients by solicitors.
- A list of current clients under contract and
the type of service provided to them. The list
should include the current value of each account and
whether the IA has discretionary authority over the
- All documents granting discretionary trading
authority over client assets.
- All written authorizations from clients
granting authority to third parties.
- A list of clients that terminated the IA's
services during the previous 12 months and the
reason for termination.
- A list of all clients directly or indirectly
related to any of the IA's affiliated/related
persons. The list must show the names of the clients
and the parties to whom they are related.
- A list of clients who have instructed the IA
to direct brokerage business to a particular
broker-dealer. This list should include the name of
the broker- dealer and the client's reason for such
directions, if known.
- A list of broker-dealers affiliated with the
IA and/or any of the IA's related persons.
- Copies of the current written agreements
concerning any soft dollar arrangements.
- Separate ledgers and journals reflecting the
trading in client accounts conducted in order to
satisfy the soft dollar commitments.
- A list of clients for whom financial plans
were started or completed in the prior 12 months.
This list should include the fee charged for each
plan and the dates the plan was started and
- Currency Transaction Reports that have been
filed with the IRS.
- A list of all investment partnerships,
trusts, and any other pooled investment vehicle
created, offered, or managed by the IA or any
associated persons to clients or prospective
- All offering memoranda, financial statements
and agreements, as applicable for all investment
trusts, and any other pooled investments
along with all reports sent to the limited partners
for the prior 12 months.
- A record of every transaction in a security
in which the IA or any associated persons have any
direct or indirect beneficial ownership.
- Minutes of the board of directors' meetings,
articles of incorporation, corporate bylaws, and
stock transfer records or partnership agreements,
- Journals or summary journals.
- General and auxiliary ledgers.
- All check books, bank statements, canceled
checks, credit card statements and cash
- Trial balances, financial statements and
internal audit papers.
- All bills and statements, whether paid or
- Order memoranda.
- The brokerage account statements and order
tickets for all proprietary trading and investment
- Employees' personal securities transactions
B. Additional Documents required if the IA has custody of
customer funds or securities:
- All documents executed by clients
authorizing the IA to withdraw client funds or
securities upon instruction to the custodian(s).
- Records showing all purchases, sales,
receipts and deliveries of securities and all debits
and credits in accounts for which the IA has
- A separate ledger of accounts for each
custodial client showing purchases, sales, receipts
and deliveries of securities.
- Copies of confirmations of all transactions
effected by or for the account of any client.
- For each security in which a custodial
client holds a position, provide a record
- client name(s);
- the date(s) that each client
purchased and/or sold the security;
- the number of shares currently
owned by each client; and
- the physical location(s) of
each client's security.
- A copy of each of the client's quarterly
account statements, as generated and delivered by
the qualified custodian. If the IA also generates a
statement that is delivered to the client, provide
access to copies of the statements along with the
date the statements were sent to the clients.