The SUTRO GROUP

Client Services

COMPLIANCE SOLUTIONS FOR BDs AND RIAs

Faced with budgetary pressures and an increasingly challenging regulatory environment, broker-dealers and investment advisors have increasingly turned to third party providers to assist in meeting their compliance responsibilities. By outsourcing, firms can reduce fixed costs and maximize both the productivity of in-house staff and the effectiveness of their compliance program. The Sutro Group offers the following compliance services to clients on an outsourced basis:

*Advertising and Sales Literature (2210 Review)

*AML Program (Independent Testing and Review)

*Annual Compliance Examinations of OSJs and Branch Offices

*Annual Supervisory Controls Assessment (3012/3013 Certification)

*Continuing Education (Needs Analysis and Training Plan)

*CRD/IARD Administration

*E-Mail/Instant Messaging (Surveillance and Review)

*Forms BD/ADV, FINRA Membership (Maintain, Update)

*SRO/SEC Pre-Examination Testing

*Surveillance (Exception Reports)

*WSPs/Compliance Manual (Maintain, Update)

OPERATIONAL DUE DILIGENCE FOR INSTITUTIONS

The Sutro Group provides operational due diligence services to institutions, fund of funds, small advisers and others to help assure that the money managers they choose are real and reputable. We determine whether a projected investment’s managers meet best practices in the alternative space.

The Sutro Group team has decades of experience in the legal, compliance and operational functions of a wide variety of registered and unregistered financial services institutions. Our unique combination of buy-side, sell-side and alternative experience helps us evaluate not just whether a prospective fund investment meets today’s standards, but whether it will meet tomorrow’s.

We stress independence and affordability. We do not manage assets, perform investment analysis or recommend funds based on investment performance. We decline to do any compliance work for hedge fund or alternative product managers who we are asked to review for clients. So our independence is complete and reliable.

Small and medium sized investment advisers are now, more than ever, seeking to help returns for their clients by considering alternative investments. The lack of experience in dealing with these assets make such advisers vulnerable to choosing products run by either unscrupulous or negligent management. An operational due diligence review from the Sutro Group can provide peace of mind, without charging as much as an adviser would earn in fees on such investment.

PRIVACY RISK ASSESSMENT (SEC REGULATION S-P)

The SEC recently proposed changes to its Privacy rule, Regulation S-P (to access the proposed rule, please click here). The proposed amendments would require broker-dealers to develop, implement and maintain a comprehensive "information security program," including written policies and procedures that provide administrative, technical, and physical safeguards for protecting personal information, and for responding to unauthorized access to or use of personal information. Institutions subject to the proposed rule would be required, for the first time, to:

Identify in writing reasonably foreseeable security risks that could result in the unauthorized disclosure, misuse, alteration, destruction or other compromise of personal information or personal information systems;

Regularly test or otherwise monitor and document in writing the effectiveness of the safeguards’ key controls, systems, and procedures, including the effectiveness of access controls on personal information systems, controls to detect, prevent and respond to attacks, or intrusions by unauthorized persons, and employee training and supervision;

Train staff to implement the information security program;

Oversee service providers by taking reasonable steps to select and retain service providers capable of maintaining appropriate safeguards for the personal information at issue, and require service providers by contract to implement and maintain appropriate safeguards (and document such oversight in writing); and

Evaluate and adjust their information security programs to reflect the results of the testing and monitoring, relevant technology changes, material changes to operations or business arrangements, and any other circumstances that the institution knows or reasonably believes may have a material impact on the program.

Sutro’s team of experienced compliance and audit professionals are expert in conducting privacy risk assessments including:

Identifying gaps and vulnerabilities;

Calculating and ranking risks;

Analyzing the effectiveness of existing controls;

Documenting testing procedures; and

Identifying effective ways to improve procedures and supervision.

By working with The Sutro Group, our clients can:

Partner with a trusted name in regulatory compliance with decades of experience dealing and negotiating with regulators;

Maximize existing compliance resources while minimizing disruptions to a firm’s ongoing business operations; and

Achieve proactive compliance with an SEC priority that will most likely become law at the conclusion of the comment period.