Fund managers are not only required to have compliance programs; they are required by the so-called “compliance rule” – Rule 206(4)‑7 under the Investment Advisers Act of 1940 (Advisers Act) – to have written policies and procedures that are “reasonably designed” to prevent violations of the Advisers Act and the SEC’s rules. The SEC has emphasized that, to fulfill that requirement, managers must tailor their compliance programs to their specific risks, processes and operations. Thus, relying on off-the-shelf compliance programs and manuals that do not reflect a manager’s individual business is not sufficient to satisfy the compliance rule. Tailoring a compliance program appropriately, however, can be a challenging task. This three-part series delves into the logistics of tailoring a fund manager’s compliance program. The first article outlines the expectations of the SEC, DOJ and investors as to the customization of compliance programs, as well as the consequences of failing to tailor those programs. The second article lays out what fund managers should consider when tailoring their programs, including the role of off-the-shelf programs. The third article identifies five triggers for a review – and possible update – of a manager’s compliance program. For examples of enforcement actions involving allegations that fund managers failed to tailor their compliance programs or manuals, see “SEC Enforcement Action Takes Aim at Adviser’s Wells Submission” (Dec. 19, 2019); “Hedge Fund Manager Deerfield Fined $4.7 Million for Failing to Adopt Insider Trading Compliance Policies Tailored to the Firm’s Specific Risks” (Sep. 21, 2017); and “SEC Charges Two Houston-Based Advisory Firms, Including a Hedge Fund Manager, with Principal Transaction, Custody Rule, Compliance Rule and Code of Ethics Violations” (Jan. 30, 2014).