Registered Investment Adviser Services

All Registered Investment Advisers (“RIA”) are required to have a compliance program that addresses certain regulatory requirements; written policies and procedures, designated chief compliance officer, annual program review, as well as other elements. The effective administration of an RIA's compliance program is challenging.

Bates Compliance’s Annual Compliance Program Support provides the following core services:

• Annual Updating Amendment
• Annual program review
• Annual compliance meeting
• Compliance program calendar
• Policy and procedures manuals and Code of Ethics (initial drafting or editing/review of existing documents)
• Regulatory filings (13F, 13H, U4, U5)
• Block of general consulting hours

This service assists the RIA with the administration of their compliance program. The core annual support services are designed to help address the main elements of a compliance program. It does not include the performance or testing of any specific compliance policy or procedure tasks. Bates provides additional tailored services to be added to the core services depending on a RIAs needs, and clients have the option of adding in those activities which would be identified and scoped separately as a service. 

All SEC-Registered Investment Advisers (“RIAs”), as well as those engaging in established best practices, are required to perform an annual review of the firm’s Compliance Program. Bates will conduct the SEC required Annual Review to test and assess the adequacy and effectiveness of your policies and procedures, fulfilling the requirements under Rule 206(4)-7 of the Investment Advisers Act of 1940. Although the rule requires only annual reviews, advisers should consider the need for interim reviews in response to significant compliance events, changes in business arrangements, and regulatory developments. 

A Bates Annual Review Consists of:

• Introduction and Initial Firm Review
• RIA Document Request
• Analysis, Interviews, and Follow-up Requests
• Report Drafting
• Delivery of Report and Exit Interview

This service is available for a wide range of clients, from small, one-member firms to the largest in the industry. Bates can scale to deliver a review consistent with the complexity of your RIA business model. Bates annual review report will help RIAs identify areas of weakness and provide recommendations for improvements. Whether you desire a third-party review perspective occasionally or establishing an ongoing review relationship with someone who knows your RIA business model, the Bates Annual Review service is tailored to your needs.

Regulatory registration is determined by several factors depending on a firm’s business model, assets under management, location of firm and clients, and type of investment offering. Before providing investment advice and receiving compensation, it is critical that a firm operate with the appropriate registration.

Bates Compliance provides the following registration services:

• Initial Firm Registration (SEC or State)
• Exempt Reporting Adviser Registration
• Transition Registrations -- State to SEC, SEC to State, ERA to SEC

All Registered Investment Advisers (“RIAs”) are subject to examination by their regulatory authority (state securities division and/or the SEC). Bates helps clients prepare for a regulatory examination and supports them in addressing any deficiencies reported as the result of an exam.

Our Mock Regulatory Exam service provides firms the opportunity to experience a dry run of the examination experience. The examination follows a routine regulatory exam process with periodic evaluation points to help RIAs assess their preparedness.

Bates Compliance will, generally, conduct this mock exam under the following stages:

• Introduction and Initial Firm Interview (presentation)
• Evaluation of Firm Interview
• Mock Exam Document Request
• Evaluation of Firm’s Document Production
• Personnel Interviews (examine like interviews of select RIA personnel)
• Evaluation of Personnel Interviews
• Exit Interview and Summary of Preparation Recommendations

This is a preparatory service for RIAs wanting to test their readiness for a regulatory examination. Clients have the option of adding on an analysis of business activities or the adequacy or testing of policies, procedures, or practices contracted as separate services. In the wake of an actual regulatory exam, Bates can assist in analyzing the results and remediating any findings.

Annual Updating Amendment (AUA)

All Registered Investment Advisers (“RIAs”) are required to file their Annual Updating Amendment (“AUA”) within 90 days after their fiscal year end. Bates Compliance assists our clients in the following ways:

• Review the RIA’s client base to confirm firm registrations and notice filings are made in the appropriate jurisdictions.
• Review Preliminary and/or Final Renewal Statement to confirm adequate funding is available in the RIA’s account.
• Update the RIA’s Form ADV 1, ADV 2A, Form CRS (if applicable), ADV 2Bs and other documents as needed through communications with and data provided by the RIA.
• Upload/Submit all required documents via the IARD Portal.

This service assists RIAs with all required updates to various filing documents. New registrations in additional jurisdictions, IAR registration, or writing new regulatory disclosure content, are distinct from the AUA program, and may be added as a separate service.

Form U4:

Representatives of investment advisers must be registered with the appropriate jurisdictions and/or self-regulatory organizations (SROs). The Form U4 (Uniform Application for Securities Industry Registration or Transfer) is used to establish that registration. FINRA, other self-regulatory organizations (SROs) and jurisdictions use the Form U4 to elicit employment history, disciplinary and other information about individuals to register them.

Bates will prepare a draft of Form U4 based on information provided by the RIA/IAR and submit the registration.

Registered individuals are under a continuing obligation to update changes to information required by Form U4 within a specified amount of time by filing an appropriate amendment, as prescribed in the FINRA By-Laws. Bates can assist with the application of those requirements and submit the updated filing(s).

Form U5:

Form U5 is the Uniform Termination Notice for Securities Industry Registration. Investment advisers must use this form to terminate the registration of an individual in the appropriate jurisdictions and/or self- regulatory organizations ("SROs"). A Form U5 must be submitted within 30 days of the individual’s employment end date and generally must be filed electronically. Firms are also required to provide the individual with a copy of their Form U5 within 30 days.

Bates can assist to draft and file the Form U5, as needed for individual registration termination.

Form 13F:

Registered Investment Advisers ("RIAs") with investment discretion of over $100 million or more of equity securities that trade on an exchange (Section 13(f) securities) must report those holdings quarterly by filing a Form 13F. The Official List of Section 13(f) Securities shows the securities that firms must report on Form 13F. The list is published quarterly. 

Bates will prepare and submit the Client’s Form 13F including:

• Identification of qualified securities
• Multiple manager reporting
• Preparation of XML Information Table
• Submission of XML Table on EDGAR

This service assists the RIA with identifying, uploading, and submitting reporting data. It does not include evaluating an RIA’s holdings.

Registered Investment Adviser (“RIA”) compliance programs will at times need resource assistance or added expertise. Whether it is a change in compliance program personnel, changes in the business, or application of regulatory requirements, RIAs may need temporary assistance - Bates Compliance can help.

Bates Compliance provides “As-Needed” compliance program support on a project or hourly basis, including:

• Vendor Due Diligence
• Business Continuity Plan Development 
• Compliance Program Training
• Marketing and Advertising Reviews

This is a temporary service to support a RIA’s periodic need for assistance with compliance program administration. Each service includes a statement of work and is engaged as a project with an estimated beginning and end date. Bates consultants and our subject matter expert affiliates can provide experience in the many areas of regulatory compliance.

Registered Investment Advisers (“RIA”) may desire a third party or an Independent Compliance Consultant (ICC) to help remediate a compliance violation or program deficiency. These reviews may be the result of an internal audit finding, in anticipation of a regulatory action, or in response to a regulatory proceeding. Due to the nature of an independent compliance consultant review, they may be performed through a firm’s outside counsel and/or as prescribed by a regulator. 

Many Bates consultants and experts are former regulators and are very familiar with regulator expectations.

Bates will, depending on the specifics of the circumstance or regulatory order, conduct this review consisting of the following stages:

• Introduction and Initial Review of the Violation
• Request and Analysis of Related Documentation
• Interviews with Relevant Parties
• Drafting of Report
• Delivery of Report and Remediation Recommendations

This service is generally in response to a specific program weakness, deficiency, or violation. For ICC’s involving regulatory orders, they typically include an initial review with a follow up review a year later. An ICC performed under a regulatory order results in a review report with remediation recommendations that is provided to both the RIA and the regulator. For non-regulatory ICC’s, the review and report is typically coordinated through the firm’s outside counsel.

Bates may involve other practice areas (such as our Data Analyses and Analytics) as well as our Bates subject matter expert affiliates to provide particular experience to the review service.