Rule 38a-1 of the Investment Company Act of 1940 requires each fund to adopt policies and procedures designed to prevent violation of the Federal Securities Laws by the fund, including oversight of compliance by each investment advisor, distributor, administrator and transfer agent of the fund and to appoint a chief compliance officer (CCO) who is responsible for administering those policies and procedures.


Section 352 of the USA PATRIOT Act amended the Bank Secrecy Act to require financial institutions, including mutual funds, to adopt policies, procedures, and internal controls reasonably designed to prevent the mutual fund from being used for money laundering or the financing of terrorist activities and to designate a person or persons (AML Officer(s)) responsible for implementing and monitoring the operations and internal controls of the AML program.


Section 302 of the Sarbanes-Oxley Act (SOX) requires the principal executive officer (PEO) and the principal financial officer (PFO) of a fund to certify the design and effectiveness of internal controls relating to periodic financial reports filed with the SEC.