Compliance Solutions for Investment Advisers

SEC 2014 Exam Priorities

Dear Compliance Professional,
The Securities and Exchange Commission today announced its examination priorities for 2014, which cover a wide range of issues at financial institutions, including investment advisers and investment companies, broker-dealers, clearing agencies, exchanges and other self-regulatory organizations, hedge funds, private equity funds, and transfer agents.

“We are publishing these priorities to highlight areas that we perceive to have heightened risk,” said Andrew J. Bowden, Director of the SEC’s Office of Compliance Inspections and Examinations.  “This document, along with our Risk Alerts and other public statements, help us to increase transparency, strengthen compliance, and inform the public and the financial services industry about key risks that we are monitoring and examining.”

The examination priorities address market-wide issues and those specific to particular business models and organizations.  The market-wide priorities include fraud detection and prevention, corporate governance and enterprise risk management, technology controls, issues posed by the convergence of broker-dealer and investment adviser businesses and by new rules and regulations, and retirement investments and rollovers.

The priorities for investment advisers include – (i) advisers who have never been previously examined (including new private fund advisers); (ii) wrap fee programs; (iii) quantitative trading models; and (iv) payments by advisers and funds to entities that distribute mutual funds.

The priorities listed for 2014 are not exhaustive and may be adjusted throughout the year in light of ongoing SEC risk assessment activities.

Here is a link to the actual SEC Release:
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