Practical Compliance Hygiene Checks for Periodic Internal Review
This article is intended to assist registered Investment Advisers in conducting a high-level self-assessment of their compliance framework.
It is not an audit report, legal advice, opinion, inspection note, or regulatory finding, and is meant purely as a professional good-practice reference.
1. Registration Status & Organisational Alignment
As a first step, an Investment Adviser may periodically reflect on whether its registration details and actual operations remain fully aligned.
Self-assessment considerations:
Does the current registration category (Individual / Non-Individual) accurately reflect the manner in which advisory services are being provided?
Have there been any changes in control, ownership, brand name, or organisational structure that required intimation or approval?
Is the role of the Principal Officer and Compliance Officer clearly documented and formally approved?
Are qualification, experience, and certification records complete and readily available?
Practical reflection:
Has any structural or operational change occurred informally before being formally evaluated for regulatory impact?
2. Client Onboarding, KYC & Agreements
Client onboarding is one of the most document-intensive areas of advisory practice and benefits from periodic internal review.
Self-assessment considerations:
Are client agreements, disclosures, and mandatory information documents consistently executed and updated?
Is KYC (including CKYC/KRA records) complete, verifiable, and retrievable for sample clients? Is there clarity on whether a separate system/login is used for IA-specific KYC processes?
Practical reflection:
If asked to produce onboarding records for a randomly selected client, could they be provided without reconstruction?
3. Risk Profiling & Suitability Process
Risk profiling and suitability analysis form the core of the advisory framework and merit careful self-review beyond form completion.
Self-assessment considerations:
Is risk profiling conducted using a documented methodology and updated periodically?
Is client consent for risk profiling demonstrable (email, system logs, or physical records)?
Is there a documented suitability process linking the client’s risk profile with the advice rendered?
Practical reflection:
Does the suitability rationale clearly stand on its own if reviewed independently at a later date?
4. Investment Advice Documentation & Audit Trail
Advisory documentation is often reviewed not for volume, but for clarity, consistency, and traceability.
Self-assessment considerations:
Is investment advice (written or oral) supported by records that establish what was advised and when?
Is the rationale for advice documented, dated, and identifiable to the relevant client?
Is there a maintained register capturing client details, nature of advice, date, product/security, and fees charged?
Practical reflection:
Could a third party understand the advisory decision-making process only from available records?
5. Fees, Banking & Execution Practices
Fee transparency and financial discipline are recurring areas of focus in professional reviews.
Self-assessment considerations:
Are fees charged strictly in accordance with applicable norms and supported by workings and ledgers?
Are all client receipts routed through proper banking channels?
Where execution or implementation support is provided, is explicit client consent demonstrable with a clear audit trail?
Practical reflection:
Is there a clear separation between advisory rationale and execution convenience?
6. Policies, Governance & Internal Controls
A mature advisory practice relies on policies not merely for filing, but for actual operational guidance.
Self-assessment considerations:
Are core policies (Code of Conduct, Grievance Redressal, AML/CFT, Conflict of Interest, Insider Trading, Internal Controls) current and approved?
Are conflicts of interest identified, disclosed, and periodically reviewed?
Is there clarity on whether any activities are outsourced and how accountability is retained?
Practical reflection:
When were policies last reviewed for relevance, not just compliance?
7. Grievance Redressal & Investor Interface
Investor-facing disclosures and grievance mechanisms benefit from periodic verification.
Self-assessment considerations:
Are investor charter, grievance mechanism details, and complaint statistics appropriately displayed on the website?
Is complaint data updated within prescribed timelines?
Is the SCORES link clearly accessible on the homepage?
Practical reflection:
Would an investor find grievance information easily without assistance?
8. Regulatory Filings & Periodic Submissions
Timely submissions are an outcome of systems, not last-minute activity.
Self-assessment considerations:
Were annual audit reports and ATRs filed within prescribed timelines?
Are half-yearly submissions complete and supported?
Is documentation relating to SaaS compliance, cybersecurity awareness, and data governance maintained?
Practical reflection:
Is compliance calendar-driven or memory-driven?
9. Communications, Advertising & Digital Presence
Public communication often carries unintended compliance implications.
Self-assessment considerations:
Is website content accurate, complete, and consistent with registration details?
Were any advertisements issued, and if so, were approvals appropriately obtained?
Are blogs, social media access, or messaging platforms governed by internal controls?
Practical reflection:
Does public content reflect advisory professionalism rather than promotional enthusiasm?
10. AML, CFT & Client Due Diligence
AML/CFT compliance is increasingly evaluated on awareness and documentation.
Self-assessment considerations:
Are AML policies, designated roles, and board approvals in place?
Is client due diligence adequately documented?
Are training records and internal awareness initiatives maintained?
Practical reflection:
Is AML treated as a living process or a static policy document?
Closing Note
A periodic self-assessment helps Investment Advisers identify gaps early, improve internal discipline, and maintain consistency between policy and practice.
Such reviews, when conducted proactively, often make professional audits and regulatory interactions smoother and more predictable.
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