Session 1: Managing Risk When Outsourcing Your Firm’s Key Functions

As the financial services industry and the regulatory environment grow more and more complex, firms

are increasingly using third-party vendors to perform business-critical roles to fulfill their regulatory requirements. At the same time, regulators have been monitoring registrants who outsource key functions. This session will provide an overview of the current regulatory landscape, discuss industry trends in outsourcing, and provide practical guidance on how to identify and manage the risks that may arise from outsourcing a particular business activity or compliance function.

Learning Objectives:

• Understand the current obligations of firms who outsource key functions, and the additional restrictions and obligations contained in proposed rules 206(4)-11 (IAs) and RN 21-29 (BDs)

• Understand how the SEC defines service providers, the proposed rule, and its six specific elements

• Explore the services and functions that are commonly being outsourced; and how RIAs and BDs are leveraging third-party vendors

• Learn about the types of risks posed to firms, clients, and investors by outsourcing certain business activity and compliance functions

• Develop strategies, policies and procedures for monitoring and managing outsourced risk