What SEC Rules Are Applicable to Mutual Funds Operating Sub-Advised Platforms?

Existing SEC Rules Require Proper Supervision and Prevention of Violations, as Follows:

• SEC Rule 38a-1: Boards and Funds must have written policies and procedures to prevent violations of securities laws and appoint a Chief Compliance Officer (CCO) to certify in writing the Fund did not violate the securities laws.
• SEC Rule 206 (4) (7): The Adviser must identify conflicts and compliance factors creating risk exposure, including trading procedures and safeguarding client assets, and adopt policies and procedures to prevent violations by the Adviser or any supervised person.
• Sec Rule 203 (e) (6): The Adviser may suffer censure, suspension or revocation due to a failure to reasonably supervise a person or contract to prevent violations, unless established procedures and systems are in place to prevent such violations.

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