How Tech Writers Can Help Investment Companies Develop Compliant Procedural Documentation

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In 2004, the Security and Exchange Commission amended the Investment Company Act of 1940 to require investment companies to adopt and consistently review their written policies and procedures. These new rules were implemented in order to assure that investment companies would not violate federal securities laws. If investment companies fail to adopt written policies and procedures, then they will be considered to be in violation by the SEC even if no harm is intended by this omission. The primary purpose of these rules is to ensure compliance of investment companies with SEC regulations and to protect the interests of shareholders and investors. Creating a clear set of compliant procedural documentation also allows investment companies to efficiently review and amend their policies and procedures when needed. 

Failure to comply with these new rules can be detrimental to the functioning of an investment company as employees may not have the necessary documentation they need to comply with regulations. Procedural documentation can provide employees with the know-how they need to avoid compliance violations that could otherwise result in private litigation and fines and other penalties imposed by the SEC. Given that it may be quite difficult and time-consuming for investment companies to develop written procedural documentation, technical documentation writers can be a crucial asset in assisting with this mammoth task. 

Investment Companies’ Policies and Procedures

The SEC provides a couple of critical areas for which investment companies must have procedural documentation for. This includes pricing of portfolio securities and fund shares, processing of fund shares, protection of nonpublic information, and a variety of other principal areas. However, the SEC also noted that compliance procedural documentation would not be standardized amongst all investment companies. They recommend that these companies evaluate their operations, assess any areas of potential violations, and address them in written policies and procedures. For instance, a smaller investment firm with fewer services or products to offer may not need as extensive procedural documentation as a larger, more complex firm. For this reason, it is vital for investment companies to approach the task of developing this documentation as it applies to their particular company model. In efforts to save time and resources, investment companies can turn to technical documentation writers to set up the proper documentation of policies and procedures that are compliant with SEC regulations. 

Common Procedural Documentation Compliance Issues 

Among the most common violations of the Investment Company Act of 1940, the SEC’s Office of Compliance Inspections and Examinations (OCIE) often finds deficiencies in written procedural documentation. The OCIE further specified that investment companies’ written policies and procedures were too general and insufficient in providing guidelines to avoid violations of federal securities laws. Additionally, annual reviews and updates to written procedural documentation were found to be poorly conducted and documented. Encompassing and thorough written procedural documentation allows investment companies to ensure compliance with federal securities laws and helps avoid potential private litigation, fines, and other penalties imposed by the SEC, and damaged reputations among clients. Although the SEC introduced the written policies and procedures requirement back in 2004, the SEC continues to note failures on behalf of investment companies in producing satisfactory documentation. Technical documentation writers can assist investment companies in assuring that their procedural documentation is clearly developed and up to SEC standards. 

How EDC Technical Writers Can Help Investment Companies 

To avoid compliance issues with the SEC and to obtain proper written policies and procedures, investment companies can turn to technical documentation writers. EDC’s technical writers have produced high-quality and compliant policy and procedure documentation for banks, software companies, and biomedical firms. Our technical documentation writers produce procedural documentation that is effective in following regulatory guidelines, serving as a crucial tool in training new employees, and clearly outlining procedures compliant with government regulations. Comprehensive written policies and procedures are necessary for investment companies to retain good standing with the SEC and for employees to ensure that they are not in violation of federal securities laws. 

Whether you need a team of consultants to produce a complete line of documentation or a single technical writer for a brief project, Essential Data’s Engagement Manager will lead the project from start to finish. At Essential Data Corporation, the quality of our work is guaranteed. Contact us today to get started. (800) 221-0093 or

Written by Diana Guerra


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