CCO Resource Center: Principal Underwriters

Chief Compliance Officer Committee

Principal Underwriters’ Oversight Policies and Procedures

In the fall of 2021, I was asked by a member of the CCO Committee to collect the policies and procedures members use to oversee their principal underwriters. These policies and procedures are required by the SEC’s Mutual Fund Compliance Program Rule, Rule 38a-1 under the Investment Company Act of 1940. In particular, Subsection (a)(1) of the rule expressly requires funds to “adopt and implement written policies and procedures reasonably designed to prevent violation of the Federal Securities Laws by the fund, including policies and procedures that provide for the oversight of compliance by each investment adviser, principal underwriter, administrator, and transfer agent of the fund.” [Emphasis added.] Subsection (a)(2) of the rule requires the fund’s board to approve the policies and procedures required by Subsection (a)(1) of the rule and Subsection (a)(3) requires an annual review of the adequacy of these policies and procedures and the effectiveness of their implementation. 

Five members of the Committee shared their policies with me. The policies I received ranged in length from 5 to 77 pages. These policies are organized in our compilation of them from the shortest to the longest. A link to this compilation is below. Please note that we have made every effort to redact any identifying or proprietary information from these documents. We apologize in advance if we failed to completely redact such information. Please do not share this document with anyone outside of your member firm. As additional members of the Committee share with us any policies and procedures they have relating to custody, we will add them to this compilation.

• Principal Underwriters’ Oversight Compliance Policies and Procedures (pdf)

The documentation provided by ICI that may be accessed by members of the CCO Committee is restricted to the member’s use only and not for distribution or reproduction. Documentation may be used internally at member organizations but may not be shared outside the organization.