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The annual compliance review
Rule 206(4)-7 makes three things a condition of giving advice: written policies, an annual review and a designated CCO.
- Policies. Adopt and implement written policies and procedures reasonably designed to prevent violations of the Advisers Act and its rules by you and your supervised persons.
- Annual review. Review, no less frequently than annually, the adequacy of the policies and the effectiveness of their implementation.
- CCO. Designate a supervised person responsible for administering the policies.
The rule does not prescribe a format. A useful review report lists each policy area, what you tested, what you found and what you fixed, signed and dated, and kept with your books and records.
Source: 17 CFR 275.206(4)-7. Read 2026-10-16. Not legal advice.