Tuesday, January 12, 2016

SEC 2016 - Release of OCIE Regulatory Examination Priorities

Standing by its commitment to provide transparency and share information with industry registrants; the SEC has released 2016 examination priorities from OCIE, Office of Compliance Inspections and Examinations.  

According to Marc Wyatt, OCIE Director, “We hope that registrants will use this information to [evaluate] their own compliance programs.”

New areas of focus this year:    

Liquidity Controls |
September 22 2015 SEC voted to propose rule 22e-4, in order to improve liquidity risk management of open-end funds such as exchange-traded funds (EFTs) and mutual funds. The key feature of open-end funds is that they allow investors to redeem their shares daily. Thus, the funds must maintain liquid assets in order to meet shareholder redemptions. 2016 examination priorities will include a look at potentially illiquid securities and various controls in place to manage risk, valuation, liquidity, trading, and capital.

Public Pension Advisors |
Pay-to-play rule 206(4)-5 was adopted June 2010 to address the inherent issues related to the power public officials have in appointing an investment advisory firm to manage public pensions. The rule limits political contributions by investment advisors and other collusive activities like entertainment and travel. 2016 examinations will continue to focus on identification of undisclosed gifts.

Product Promotion & Disclosure | 
Existing and emerging investment products can be complex and high risk. For 2016, the OCIE asserts its commitment to protecting investors from sales practices that result in a breach of fiduciary responsibility or unsuitable investments.

On a broader scope, OCIE indicates sweeps to unravel risk across various types of industry business models such as; investment companies, broker-dealers, transfer agents, clearing agencies, and exchanges, areas of focus include:
  • Protecting Retail Investors and Investors Saving for Retirement
    • Growing numbers of investors face a greater dependence on their own savings for retirement. The initiative to protect investors includes focus on basis for recommended investments, conflicts of interest, and marketing disclosure.
  • Assessing Market-Wide Risks
    • Maintaining orderly and efficient markets is at the core of the SEC’s mission. Examinations will include a look into structural risks and trends, over multiple firms or entire industries.
  • Using Data Analytics to Identify Signals of Potential Illegal Activity
    • Always striving to detect risk, the OCIE mines data intelligence from examinations and regulatory filings. Algorithms, data analysis, and review are leveraged to identify registrants and areas with elevated risk profiles.

RND Resources Inc is a leading compliance consulting firm helping broker-dealers, investment advisors, and fund managers meet regulatory compliance obligations. Visit our website for more details:  www.finracompliance.com

Are you a new broker-dealer or registered investment advisory firm needing help with cyber-security compliance.  We can help.  Call us for a quote (818) 657-0288 or visit our website for details.

No comments:

Post a Comment

Your comments are welcome: