Recruiter's Glossary

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Rule 206(4)-7

Term from Compliance industry explained for recruiters

Rule 206(4)-7 is a key regulation that investment advisers must follow. It requires companies that manage investments to have proper safeguards and checks in place to protect their clients. Think of it as a company's rulebook that makes sure they're doing everything correctly and legally. This rule is part of the Investment Advisers Act and is overseen by the SEC (Securities and Exchange Commission). It's sometimes called the "Compliance Program Rule" or "Compliance Rule" because it requires companies to have a formal compliance program with written policies, regular reviews, and a designated person in charge of compliance.

Examples in Resumes

Developed and implemented Rule 206(4)-7 compliance program for $2B investment adviser

Led annual review of 206(4)-7 policies and procedures for multiple advisory firms

Served as Rule 206(4)-7 Chief Compliance Officer for registered investment adviser

Typical job title: "Compliance Officers"

Also try searching for:

Chief Compliance Officer Compliance Manager Compliance Director Investment Adviser Compliance Officer Regulatory Compliance Manager SEC Compliance Specialist

Where to Find Compliance Officers

Professional Associations

Online Resources

• SEC Investment Adviser Regulation Office
• LinkedIn Compliance Groups
• Compliance Forums

Job Boards

Example Interview Questions

Senior Level Questions

Q: How would you design a compliance program that satisfies Rule 206(4)-7 requirements?

Expected Answer: A strong answer should explain how to create comprehensive written policies, establish review procedures, assign compliance responsibilities, and ensure regular testing of the program. They should mention risk assessment, documentation, and training components.

Q: What are the key elements of an annual compliance review under Rule 206(4)-7?

Expected Answer: Should discuss reviewing all policies and procedures, testing their effectiveness, documenting findings, recommending improvements, and presenting results to senior management. Should mention the importance of addressing any deficiencies found.

Mid Level Questions

Q: What documentation is required to demonstrate compliance with Rule 206(4)-7?

Expected Answer: Should mention written policies and procedures, annual review reports, risk assessments, training records, and monitoring/testing results. Should understand the importance of maintaining detailed records.

Q: How do you monitor ongoing compliance with Rule 206(4)-7?

Expected Answer: Should explain regular testing procedures, review schedules, employee training programs, and methods for tracking and documenting compliance activities throughout the year.

Junior Level Questions

Q: What is Rule 206(4)-7 and why is it important?

Expected Answer: Should explain that it's an SEC rule requiring investment advisers to have written compliance policies and procedures, regular reviews, and a Chief Compliance Officer. Should understand its role in protecting clients.

Q: What are the basic requirements of Rule 206(4)-7?

Expected Answer: Should identify the three main requirements: written policies and procedures, annual review of those policies, and designated Chief Compliance Officer. Should understand these are minimum requirements.