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Bisys launches compliance services for SEC Rule 38a-1

07 April 2004  |  584 views  |  0

BISYS, a leading provider of business process outsourcing solutions for the financial services sector, today announced the introduction of its comprehensive ComplianceEDGE program, which provides the policies, procedures, testing, reporting, and recordkeeping required for mutual fund companies to comply with the new SEC Rule 38a-1 by October 5, 2004.

BISYS' ComplianceEDGE program was strategically designed to assist fund companies in establishing a culture of compliance throughout their service organizations, and to facilitate mandatory compliance with the federal securities law established by the new SEC Rule 38a-1 of the Investment Company Act of 1940. Initial and ongoing compliance with Rule 38a-1 requires investment companies to develop, implement, and maintain comprehensive compliance programs, including written policies and procedures that address compliance with applicable federal securities laws by their funds and their service providers. Rule 38a-1 also requires fund Boards to designate a chief compliance officer (CCO) that reports directly to the Board and is responsible for the implementation and maintenance of compliance programs. Fund CCOs also must conduct annual reviews of their compliance programs and present the results to fund Boards.

According to Fred Naddaff, president of BISYS Fund Services, "We leveraged and enhanced BISYS' extensive compliance and regulatory expertise to develop our ComplianceEDGE program, which is a comprehensive suite of compliance services designed to address the new regulatory requirements. Our program provides the policies, procedures, testing, reporting, and recordkeeping required for compliance with Rule 38a-1. The ComplianceEDGE program also provides funds with the ability to satisfy the CCO requirement without the need to recruit and employ additional staff. In addition to BISYS' staff of more than 70 industry experts and experienced consultants, which includes former regulators from the SEC and NASD, we are recruiting additional professionals qualified to serve in the CCO roles. Considering today's dynamic regulatory environment, we expect that our ComplianceEDGE program, combined with our full range of proven legal, regulatory, and compliance services, will greatly benefit our mutual fund clients."

Lisa Hurley, executive vice president and general counsel of BISYS Fund Services, said, "We identified a critical need among our fund clients for consistent, expert administration of compliance programs. The ComplianceEDGE program will enable clients to benefit from industry best practices in implementing the required compliance policies and procedures, and will assist them in implementing compliance programs under Rule 38a-1 that should prove to be functionally superior and more cost-effective than a stand-alone program developed internally by an individual mutual fund company. Our ComplianceEDGE program also can eliminate the inherent conflicts of interest that occur when an investment adviser employs the fund CCO. Our program provides for the presence of a senior compliance officer across all relevant service providers to the fund."

BISYS' ComplianceEDGE program includes the features to:
  • Develop, implement, and maintain a comprehensive fund compliance program that meets the requirements of SEC Rule 38a-1;
  • Recruit and retain a Board-approved CCO;
  • Provide ongoing CCO supervision; and
  • Provide comprehensive administrative and consultative support utilizing BISYS' compliance infrastructure and regulatory professionals.

As an additional option, annual reviews of compliance programs can be independently provided by BISYS Regulatory Services. These reviews include the:
  • Assessment of fund compliance policies and procedures for adequacy and effectiveness relative to the new SEC Rule 38a-1,
  • Review of delegation arrangements and contractual obligations,
  • Preparation of a written report and program assessment for the fund CCO and Board,
  • Enhancement of written policies and procedures as recommended
  • Training for fund CCOs employed by other service providers, and
  • Third party annual review of separate service provider programs.

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