Current Environment Highlights the Value of a Targeted Mock Regulatory Examination

Current Environment Highlights the Value of a Targeted Mock Regulatory Examination

Investment managers are inevitably experiencing numerous obstacles in this challenging environment.  First, they must fulfill their portfolio management responsibilities. Likewise, they must ensure their middle and back office teams are functioning properly.
Duff & Phelps has identified four areas to review during a mock regulatory examination that add significant value to advisory businesses during this time:

  • Disaster recovery procedures, including business continuity plans
  • Cyber security procedures, including incident response plans
  • Privacy policies and procedures
  • Valuation procedures, including the valuation of thinly traded and/or illiquid investments

With the current environment, these four areas pose as potential risks for advisers as well as areas that require improvement. Duff & Phelps can help firms navigate by either conducting a limited scope mock examination of these four areas or providing enhanced consultation with our experts.

Investment managers should be asking themselves the following questions:

Are Our Disaster Recovery Procedures Working During This Time?

  • Do all key employees have full access to perform their job responsibilities?
  • Are all key portfolio management, trading, and middle and back office functions working properly?
  • Are we documenting any deficiencies that we need to correct going forward or in real time?

Have We Had Any Actual or Attempted Cyber Security Intrusions During This Time?

  • Are we using secure means of communication?
  • Have we conducted penetration testing?
  • Are we documenting and addressing any actual or attempted intrusions? 

How Are We Ensuring the Privacy of Investor Information During This Time?

  • Are we continuing to ensure that all investor information is properly safeguarded?

How Are We Valuing Thinly Traded and/or Illiquid Investments During This Time?

  • Are we confident in the internally modeled or third-party valuations we are using?
  • Are we marking down certain impaired assets?
  • Are we documenting any valuation issues and how such issues are being addressed?

Reach out to the Duff & Phelps Compliance and Regulatory Consulting team for more information. 

Visit the Duff & Phelps Coronavirus Resource Center for more insight. 

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