SECURITIES AND EXCHANGE COMMISSION ATLANTA REGIONAL OFFICE

Transcription

1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION ATLANTA REGIONAL OFFICE 950 EAST PACES FERRY ROAD NE] ATLANTA, GA 30326] DELIVERY VIA SECURED February 26, 2014 Chief Compliance Officer Brentwood, TN Re: Examination of ( Registrant ) Dear Mr. : The U.S. Securities and Exchange Commission s Atlanta Regional Office is conducting an examination of Registrant. Pursuant to Section 204 of the Investment Advisers Act of 1940, Section 17 of the Securities Exchange Act of 1934 and Rules 17a-3 and 17a-4 thereunder, please provide the requested items listed on the attached schedule by close of business Monday, March 3, Additional documents will be requested during the course of the examination. Please provide all requested information in electronic format (e.g. Word, Excel, Acrobat, etc.), to the extent possible. Additionally, please provide copies of supporting documentation and exhibits by item number. For those items not applicable, please memorialize as not applicable. Information is requested for the period January 1, 2013 through January 31, 2014 (the "Examination Period"), unless noted otherwise. As part of our pre-examination planning process, we actively coordinate examination oversight to ensure that regulatory efforts are not duplicative. If you have any concerns in this regard, please contact the undersigned. However, please be advised that one of the Commission s responsibilities is to provide oversight of the quality and effectiveness of the examinations conducted by the self-regulatory organizations ( SRO ). As such, it is possible that at least part of this review may involve reviewing the prior examination work of an SRO, including a sample of documents that may also have been a part of an SRO examination. Additional information about compliance examinations and the examination process is included in the enclosed "Examination Information brochure (SEC Form 2389). Also enclosed is

2 information regarding the Commission s authority to obtain the information requested and additional information: "Supplemental Information for Regulated Entities Directed to Supply Information Other Than Pursuant to a Commission Subpoena" (SEC Form 1661). If you have any questions concerning this examination or the documents the Commission has requested, please contact David McClellan at (404) Thank you for your cooperation. Sincerely, David McClellan David McClellan Staff Accountant Enclosures: Information Request List Examination Information Brochure (Form 2389) Supplemental Information (Form 1661)

3 Examination Information Request List Examination Period Information is requested for the period January 1, 2013 through January 31, 2014 (the "Examination Period") unless otherwise noted. Organizing the Information to be Provided In order to efficiently process the material assembled for the staff's review, please label the information so that it corresponds to the item number in the request list. If information provided is responsive to more than one request item, you may provide it only once and refer to it when responding to the other request item numbers. If any request item does not apply to your business, please indicate N/A (not applicable). Information to be Provided by Close of Business Monday, March 3, 2014: 1. A copy of Registrant s organization chart showing ownership percentages and control persons/principals, and a schedule or chart of all affiliated entities. Include all entities that are commonly controlled by, or under common control with, Registrant. 2. A list of the Registrant s current employees, including their hire date; name; titles; CRD number; location; total production for the calendar year 2013; total compensation for the calendar year 2013; indicate whether individual is a registered representative or an investment advisor representative or both; and areas of responsibility. 3. Names of any joint ventures or any other businesses in which the Registrant or any officer, director, portfolio manager, or trader participates or has any interest (other than their employment with Registrant), including a description of each relationship. 4. Names of any of the employees who resigned during the examination period and information regarding the reason for their departure. 5. List of all branch offices and non-branch office locations - For each location provide an address; branch identifier; designated supervisor(s); number of employees; date established; and type of office (i.e. branch, OSJ, other business location, etc.); type of operations (i.e. sales office, trading desk, etc.), the date of the most recent branch inspection, and the date of the next scheduled branch inspection. 6. Form ADV Part 2B (also known as Brochure Supplement) furnished to clients during the examination period. 7. Any threatened, pending and settled complaint, litigation, or arbitration involving Registrant or any supervised person (if it relates to the individual s association with the Registrant or a securities-related matter) including a description of the allegations, the status, and a brief description of any out of court or informal settlement.

4 8. A record of any breach with Registrant s compliance policies and procedures during the examination period and of any action taken as a result of such non-compliance. 9. Copy of Written Supervisory Procedures, Compliance Manual and any other policies and procedures that were in effect during the examination period. 10. A list of exception reports utilized to supervise Registrant s business activities. Please provide a description, the purpose of the report(s), and who was responsible for reviewing the report(s). 11. Revenue by product for the calendar year end December 31, Gross production by representative by product for calendar year end December 31, Provide the information below for all wrap fee programs sponsored by Registrant. The preferred format for this information is in Excel. A. Name of the wrap program; B. Name(s) of the investment manager(s); C. Name(s) of any sub-adviser(s); D. Program s inception date and termination date (if during the Examination Period); E. A brief description of the program s strategy and investments; F. Number of accounts in the program; G. Whether the portfolio manager (and/or sub-adviser) has discretionary authority over the account; H. Total value of the program s assets; I. Whether any of the accounts in the program custody their assets outside of the Registrant. If so, please provide the account names and their respective custodians; J. Total fee percentage charged by Registrant, as sponsor to the program. K. Total fee percentage paid to third-party money managers L. Total amount paid to third-party money managers for calendar year ending December 31, Copies of the contracts between Registrant, as sponsor, and the investment manager(s) for each wrap fee program. 15. The Form ADV Part 2 for the money managers participating in the wrap-fee progam furnished to clients during the Examination Period and any disclosure document used in conjunction with or in lieu of Part List (in Excel format) of all brokerage customers and investment advisory clients. Please include the following information: a. indicate whether advisory or brokerage account; b. indicate whether account is in the wrap fee program; c. account number;

5 d. first name; e. last name; f. inception date; g. mailing address; h. date of birth; i. net worth; j. account balance as of December 31, 2012 and December 31, 2013; k. investment objective (e.g., capital preservation, income, growth, speculation, etc.); l. investment program; m. investment strategy (e.g., global equity, large-cap growth, high-yield, balanced, long-short, statistical arbitrage, etc.); n. discretionary or non-discretionary account; o. whether the account is approved for margin trading; p. whether the account is approved for options trading; q. account portfolio manager(s), IAR, and/or RR; r. whether the account is a related person or an affiliated person; s. the type of account (e.g., individual, defined benefit retirement plan, registered fund, or unregistered fund, etc.); t. account custodian and location; u. whether Registrant, an officer, or an affiliate acts as trustee, co-trustee, or successor trustee, or has full power of attorney for the account; v. whether Registrant or related persons are deemed to have custody of, possession of, or access to the account assets, and if so, the location of the assets; w. for advisory accounts, the current annual advisory fee percentage; x. the value of each advisory client's account that was used for purposes of calculating its 3Q 2013 and 4Q 2013 advisory fee; y. the advisory fee charged for the 3Q 2013 and 4Q 2013 billing periods; z. whether the account pays a performance fee and the most recent performance fee amount charged; aa. whether or not advisory fees are paid directly from the client s custodial account; and bb. for advisory accounts obtained during the examination period, provide the name(s) of any consultant(s) or solicitor(s) related to obtaining the client, if any. 17. List of all accounts closed during the examination period, including whether the account was an advisory or brokerage account; account number; account name; inception date; balance before closed/transferred; and date closed. 18. (In Excel Format) Trade Blotter for the Examination Period Please provide separate blotters for advisory accounts and brokerage accounts. The blotters should show all securities transactions (including all trade errors, cancelations, re-bills and reallocations). The blotter should include all accounts, including current and former clients, proprietary and/or trading accounts and access persons. Include the following fields (if possible):

6 a. Transaction Type (equity, fixed income, mutual fund, option, etc.) b. Trade Date c. Settlement Date d. Name e. Account Number f. RR name g. RR code h. RR Branch code i. Buy/Sell j. Solicited/Unsolicited k. Security Description (Issuer) l. Security Description (Coupon, Maturity, etc) m. CUSIP n. Security Symbol o. Quantity p. Unit Price q. Accrued Interest r. Principal/Proceeds/Notional Value s. Total Commission/Markup/Markdown/Sales Credit t. Fees u. Net Amount v. Firm Capacity w. For mutual funds indicate share class type (A, B,C, etc.) x. For mutual funds a notation if ROA/LOI used y. For variable annuity transactions include whether initial purchase or exchange, and surrender charge (if applicable). 19. (In Excel Format) Blotters or other records of original entry, containing an itemized daily record of all monies receipts and disbursements reflecting all monies received or transmitted, including, but not limited to, cash, wires, journals, transfers, etc. 20. Account Transfers/Journals Provide a download of all transfers or journals between accounts for movement of cash and securities. This information should include: (a) the date of transfer or journal; (b) the name of the security, security description, its symbol, and cusip, or an indication if cash, is being moved; (c) the amount or quantity of the security or cash associated with each transaction; (d) the account number and registration identifying the account where the securities or cash is being transferred or journal from ; (e) the account number and registration identifying the account where the securities or cash is being transferred or journal to ; and (f) the RR name and number. 21. Brokerage Accounts: Provide approximate number of transaction processed per month via brokerage accounts and how many by check/application.