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On January 16, 2014, The Investment Company Institute ("ICI") released an updated framework for Financial Intermediary Controls and Compliance Assessment Engagements ("FICCA")1. The original framework, developed in 2008, provided guidance for investment companies related to their oversight of the financial intermediaries through which they distribute their products; specifically applicable to omnibus relationships. The framework contains seventeen recommended areas of oversight, from management reporting and risk governance, to processing and technology.
The most recent update to the framework contains several noteworthy improvements. Primary changes include:
* Annual review of the seventeen control areas, previously biennial;
* Addition of Blue Sky reporting review;
* Removal of "Financial Viability," due to its inclusion in the intermediary's audited financial statements;
* Indication of whether each focus area should be addressed in a management assertion or in a control report;
* Glossary of terms;
* Mapping template for control reports, indicating which document would be most appropriate for intermediaries to supply in each of the focus areas.
In addition to the modifications listed above, the matrix containing specific audit requests was updated in several areas. Significant updates include the following:
* An expansion of the Privacy Protection focus area that includes formal documentation, approval and management oversight...