Asset Managers: Are You Ready for Your Exam? Steps You Should Take Now

 
S&W Client Advisory
March 17, 2017

Last week we told you about the five biggest pet peeves of the SEC’s Office of Compliance Inspections and Examinations (OCIE) when examining investment advisers (see "The Top Five ‘Gotcha’ Deficiencies Plaguing Asset Managers and How to Avoid Them"). This week, we want to get you ready for your exam.  Here are the OCIE’s examination priorities for 2017 for registered investment advisers and affiliated broker-dealers.[1] This year, when conducting examinations of registered investment advisers, the OCIE’s focus will revolve around three themes:

Retail Investor Issues

Elderly and Retiree Investor Issues

Market-Wide Risk Issues


[1] Private fund advisers, you aren’t off the hook.  The OCIE has noted that they will continue to examine private fund advisers as well with respect to conflicts of interests and disclosure of such conflicts.


In order to assure that the OCIE is successful in achieving its examination priorities, the OCIE intends to utilize data analytics in order to identify registrants that may have elevated risk profiles.  What this means is not clear but being an outlier with respect to how you prepare, implement and monitor your compliance policies and procedures is not necessarily a good thing.  The OCIE also intends to step up oversight of FINRA. The OCIE intends to pressure FINRA to increase the quality of their broker-dealer examinations.

If you would like help staying outside of the OCIE’s penalty box, please feel free to contact Joel Telpner in New York (jtelpner@sandw.com, 212.660.3015) or John Hunt in Boston (jhunt@sandw.com, 617.338.2961).