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Asset Management Compliance and Ethics Audit Checklist

A comprehensive checklist for auditing compliance and ethical practices in asset management firms, focusing on regulatory adherence, ethical conduct, and investor protection measures.

Asset Management Compliance and Ethics Audit Checklist
by: audit-now
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About This Checklist

In the highly regulated asset management industry, maintaining robust compliance and ethical standards is crucial for protecting investor interests and preserving institutional integrity. This Asset Management Compliance and Ethics Audit Checklist is designed to help financial institutions evaluate and enhance their adherence to regulatory requirements and ethical practices in investment management operations. By systematically assessing key areas of compliance and ethics, organizations can identify potential vulnerabilities, ensure alignment with regulatory expectations, and foster a culture of integrity. This comprehensive checklist serves as a vital tool for mitigating regulatory risks, enhancing investor trust, and maintaining the highest standards of professional conduct in the asset management sector.

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Industry

Financial Services

Standard

Investment Company Act of 1940, Investment Advisers Act of 1940, GIPS (Global Investment Performance Standards)

Workspaces

Trading floors

Occupations

Compliance Officer
Legal Counsel
Risk Manager
Portfolio Manager
Ethics Officer

Asset Management Compliance and Ethics Audit

(0 / 5)

1
Are investor protection measures in place?

Select the status of investor protection measures.

To ensure the firm is safeguarding investor interests.
2
Please provide any comments or observations from the ethics review.

Enter comments or observations.

To gather qualitative insights into the ethics review process.
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3
What is the score from the fair valuation assessment?

Provide a score from 1 to 5.

To evaluate the effectiveness of fair valuation processes.
Min: 1
Target: 5
Max: 5
4
Is there a conflicts of interest policy in place?

Indicate if a policy exists.

To verify that potential conflicts of interest are managed appropriately.
5
Is the organization adhering to the Code of Ethics?

Select compliance status.

To ensure ethical standards are maintained within the organization.
6
Please summarize the findings from the last audit.

Provide a summary of audit findings.

To capture key insights and issues identified during the last audit.
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7
When was the last internal compliance audit conducted?

Select the date of the last audit.

To track the frequency of internal audits and ensure they are conducted regularly.
8
How many incidents were reported in the last year?

Enter the number of incidents.

To evaluate the frequency of incidents related to compliance breaches.
Min: 0
Target: 0
9
Is the organization compliant with regulatory reporting requirements?

Select compliance status.

To ensure that all regulatory obligations are met in a timely manner.
10
What percentage of staff has completed compliance training?

Enter the percentage of completion.

To assess the effectiveness of compliance training programs.
11
When is the next scheduled compliance training?

Select the date of the next training session.

To ensure ongoing education and awareness of compliance requirements.
12
What actions have been taken to improve compliance based on previous audits?

Provide details of improvement actions.

To document proactive measures taken to enhance compliance culture.
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13
How many findings were noted in the latest annual compliance audit?

Enter the number of findings.

To gauge the effectiveness of compliance programs based on audit findings.
Min: 0
Target: 0
14
Is there adherence to the investment policy?

Select adherence status.

To verify compliance with established investment guidelines.
15
Is there an ethics hotline available for reporting concerns?

Indicate if the hotline is available.

To ensure that employees have a confidential way to report ethical concerns.
16
When was the last compliance training conducted?

Select the date of the last training session.

To ensure that employees receive regular training on compliance matters.
17
Please provide comments or feedback on current compliance procedures.

Enter your comments on compliance procedures.

To gather qualitative insights for improving compliance processes.
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18
How many compliance breaches have been reported in the last year?

Enter the number of breaches.

To evaluate the effectiveness of compliance controls and risk management.
Min: 0
Target: 0
19
Is the organization compliant with GIPS (Global Investment Performance Standards)?

Select compliance status.

To verify adherence to industry standards for performance reporting.
20
What are the key regulatory guidelines applicable to the organization?

List the key regulatory guidelines.

To ensure that the organization is aware of and adheres to relevant regulations.
21
When is the next scheduled review date for the conflict of interest policy?

Select the date for the next policy review.

To ensure that policies are regularly reviewed and updated as needed.
22
Provide a summary of any conflict of interest cases that arose in the past year.

Enter a summary of conflict cases.

To understand the context and handling of conflicts of interest within the organization.
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23
How many training sessions on conflict of interest management have been held in the past year?

Enter the number of training sessions.

To assess the organization's commitment to educating employees about conflict of interest policies.
Min: 0
Target: 2
24
Have all potential conflicts of interest been disclosed by employees?

Select disclosure status.

To ensure transparency and accountability among employees regarding conflicts of interest.
25
Is there a documented conflict of interest policy?

Indicate if the policy exists.

To verify that the organization has a formal policy to manage conflicts of interest.

FAQs

Asset management compliance and ethics audits should be conducted at least annually. However, more frequent reviews may be necessary in response to significant regulatory changes, new product launches, or changes in the firm's operational structure.

Key areas typically include investment compliance monitoring, conflicts of interest management, personal trading policies, code of ethics enforcement, anti-money laundering procedures, fair valuation practices, marketing and advertising compliance, and regulatory reporting obligations.

The audit should involve compliance officers, legal counsel, risk managers, portfolio managers, operations personnel, and potentially external auditors or consultants specializing in asset management compliance.

Firms should develop a detailed remediation plan for each identified issue, assigning responsibilities and deadlines for resolution. This may include updating policies and procedures, enhancing training programs, or implementing new compliance monitoring systems. Regular progress reviews should be conducted to ensure timely implementation of improvements.

Technology plays a crucial role in modern compliance and ethics audits, including automated compliance monitoring systems, AI-powered surveillance tools for detecting potential misconduct, integrated platforms for managing conflicts of interest, and advanced analytics for regulatory reporting and risk assessment.

Benefits

Ensures compliance with asset management regulations and industry standards

Identifies potential gaps in ethical practices and compliance procedures

Reduces the risk of regulatory violations and associated penalties

Enhances investor confidence through demonstrated commitment to ethical practices

Provides a structured approach to continuous improvement of compliance and ethics programs