Practice question, Compliance program
Describe the chief compliance officer's other responsibilities, the time actually available for compliance and the people, budget and systems that support the program.
Taft practice question: not an official regulator question. SEC Division of Examinations, United States (federal). For SEC-registered investment advisers. Evidence category: Governance records.
Not legal advice. A practice prompt for rehearsing how your team explains its controls and evidence. No scoring, no model answer, no implication that a regulator will ask these words.
Authored by Taft. Last checked 2026-11-09. All questions.
Why it is relevant
Staff observed advisers that may not have devoted sufficient resources to compliance, including cases where the CCO was assigned additional and unrelated responsibilities that left limited time for compliance.
Sources: [1] Staff Observations, Compliance Policies and Procedures
Evidence to locate
Suggested, not mandatory. A regulator's actual request list governs.
No evidence cues listed.
Follow-up prompts
Who covers compliance when the CCO is unavailable?
Applicability
- Applies to
- Advisers registered or required to be registered with the SEC.
- Does not apply to
- Not stated.
Cite
Cite the official source first. Then: Taft Compliance Group, Exam-prep toolkit (draft), question q-cco-resources, https://taftcompliance.com/resources/exam-prep-toolkit/questions/q-cco-resources, last checked 2026-11-09.
Sources
U.S. Securities and Exchange Commission, Division of Examinations, Risk Alert: Observations from Examinations of Newly-Registered Advisers (staff statement). regulator guidance. Staff Observations, Compliance Policies and Procedures, pages 3 to 4.
https://www.sec.gov/files/risk-alert-newly-registered-ias-032723.pdf
Checked 2026-11-09; published 2023-03-27.
Supporting passage
The staff observed compliance policies and procedures that: (1) did not adequately address certain risk areas applicable to the firm, such as portfolio management and fee billing; (2) omitted procedures to enforce stated policies, [...] and/or (3) were not followed by advisory personnel, typically because the personnel were not aware of the policies or procedures or the policies or procedures were not consistent with their businesses or operations. [...] Used off-the-shelf compliance manuals that were not tailored for consistency with the advisers' operations and business lines. May not have devoted sufficient resources to comply with regulatory requirements and their own policies and procedures (e.g., advisers may have assigned additional and unrelated responsibilities to the chief compliance officer ("CCO"), resulting in limited time for the CCO to dedicate to compliance), or to ensure compliance personnel understood actual business practices. Did not have adequate business continuity plans, including succession plans.
Changes to this question
No released changes.