“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.