Fund managers may outsource certain tasks or operations to third parties, such as fund administrators, auditors, cybersecurity experts, pricing services and valuation agents. If they do not adequately supervise or manage those vendors, however, they may run into problems – and even face enforcement actions. For example, a registered investment adviser was penalized $175,000 after a third-party service provider used inaccurate valuation dates and misapplied the adviser’s investment model during backtesting, which resulted in an overstatement in the adviser’s advertising of that model’s backtested results by more than 40 percent. See “Advisers Must Ensure the Accuracy of Backtested Performance Claims” (Jan. 31, 2019). Broker-dealers have a similar duty to properly supervise third-party vendors. In August 2021, FINRA released a regulatory notice to remind member firms of their supervisory duties as to those vendors. Regulatory Notice 21‑29 (Notice) reiterates the applicable regulatory obligations; summarizes recent trends in examination findings, observations and disciplinary actions; and provides questions member firms may consider when evaluating their systems, procedures and controls relating to vendor management. Although the Notice is geared toward broker-dealers, its guidance is generally applicable to fund managers’ oversight and management of their vendors. This article summarizes the Notice and provides a checklist created from the questions at the end of the Notice that all fund managers can use to assess the sufficiency of their vendor management procedures and controls. See “The Importance of Exercising Due Diligence When Hiring Auditors and Other Vendors” (Jun. 21, 2018).