Mississippi Administrative Code › Title 1 - Secretary of State › Part 14 - Securities Regulation › Chapter 6 - INVESTMENT ADVISERS › Rule 1-14-6.23 - Compliance-Supervision

Current through June 25, 2024
A. It is unlawful
				for an investment adviser registered or required to be registered pursuant to
				the Act to provide investment advice to clients unless the investment adviser
				establishes, maintains, and enforces written policies and procedures tailored
				to the investment adviser's business model, taking into account the size of the
				firm, type(s) of services provided, and the number of locations of the
				investment adviser. The written policies and procedures must provide for at
				least the following:
1.
Compliance
				Policies and Procedures
. The investment adviser must establish,
				maintain, and enforce written compliance policies and procedures reasonably
				designed to prevent and detect any violations of the Act and Rules promulgated
				thereunder.
2.
Supervisory
				Policies and Procedures
. The investment adviser must establish,
				maintain, and enforce written supervisory policies and procedures reasonably
				designed to prevent violations by the investment adviser's supervised persons
				of the Act and the Rules promulgated thereunder.
3.
Proxy Voting Policies and
				Procedures
.
a. If the investment
				adviser has the authority to vote client securities:
i. The investment adviser must establish,
				maintain, and enforce written proxy voting policies and procedures that are
				reasonably designed to ensure that the investment adviser votes client
				securities in the best interest of clients. These procedures must include how
				the investment adviser addresses material conflicts that may arise between its
				interests and those of the investment adviser's clients.
ii. Disclose to clients how they may obtain
				information from the investment adviser about how it voted with respect to
				their securities.
iii. Describe to
				clients the investment adviser's proxy voting policies and procedures and, upon
				request, furnish a copy of the policies and procedures to the requesting
				client.
b. If the
				investment adviser does not have the authority to vote client securities, then
				this information must be disclosed to clients.
4.
Physical Security and
				Cybersecurity Policies and Procedures
. The investment adviser must
				establish, implement, update, and enforce written physical security and
				cybersecurity policies and procedures reasonably designed to ensure the
				confidentiality, integrity, and availability of physical and electronic records
				and information. The policies and procedures must be tailored to the investment
				adviser's business model, taking into account the size of the firm, type(s) of
				services provided, and the number of locations of the investment adviser.
a. The physical security and cybersecurity
				policies and procedures must:
i. Protect
				against reasonably anticipated threats or hazards to the security or integrity
				of client records and information;
ii. Ensure that the investment adviser
				safeguards confidential client records and information; and
iii. Protect any records and information the
				release of which could result in harm or inconvenience to any client.
b. The physical security and
				cybersecurity policies and procedures must cover at least five functions:
i.
Identify
. Develop the
				organizational understanding to manage information security risk to systems,
				assets, data, and capabilities.
ii.
Protect
. Develop and implement the appropriate safeguards to
				ensure delivery of critical infrastructure services.
iii.
Detect
. Develop and
				implement the appropriate activities to identify the occurrence of an
				information security event.
iv.
Respond
. Develop and implement the appropriate activities to
				take action regarding a detected information security event.
v.
Recover
. Develop and
				implement the appropriate activities to maintain plans for resilience and to
				restore any capabilities or services that were impaired due to an information
				security event.
c.
Privacy Policy
. The investment adviser must deliver upon the
				investment adviser's engagement by a client, and on an annual basis thereafter,
				a privacy policy to each client that is reasonably designed to aid in the
				client's understanding of how the investment adviser collects and shares, to
				the extent permitted by state and federal law, nonpublic personal information.
				The investment adviser must promptly update and deliver to each client an
				amended privacy policy if any of the information in the policy becomes
				inaccurate.
5.
Material Nonpublic Information Policy and Procedures
. The
				investment adviser must establish, maintain, and enforce written policies and
				procedures reasonably designed to prevent the misuse of material, nonpublic
				information by the investment adviser or any person associated with the
				investment adviser.
6.
Business Continuity and Succession Plan
. The investment
				adviser must establish, maintain, and enforce written policies and procedure
				relating to a business continuity and succession plan. The plan must provide
				for at least the following:
a. The
				protection, backup, and recovery of books and records.
b. Alternate means of communications with
				customers, key personnel, employees, vendors, service providers (including
				third-party custodians), and regulators, including, but not limited to,
				providing notice of a significant business interruption or the death or
				unavailability of key personnel or other disruptions or cessation of business
				activities.
c. Office relocation in
				the event of temporary or permanent loss of a principal place of
				business.
d. Assignment of duties
				to qualified responsible persons in the event of the death or unavailability of
				key personnel.
e. Otherwise
				minimizing service disruptions and client harm that could result from a sudden
				significant business interruption.