Recent Washington, DC Roundtable event sheds light on SEC agenda
Last week, FrontLine’s Amy Lynch directed a series of questions to Mark Dowdell, the Assistant Regional Director of the Philadelphia Office of the SEC. Here’s a sampling of what was revealed:
- The SEC is currently conducting risk analyses of firms and ranking registrants based on various risk factors such as:
- Previous exam findings
- Product/service offerings
- Employee disciplinary issues
- Customer types
- Date of last exam
- OCIE Exam stats for (2016 fiscal year) include 1,400 RIA exams (18% of universe) completed that resulted in 74% of firms receiving deficiency letters and 8% referred to Enforcement
- Enforcement cases coming out soon will include cases on share classes, orphan accounts
- If the Rule 206(4)-7 Annual Review is performed by or through a law firm, the annual review documentation is considered part of Rule 204-2 requirements and therefore, a firm cannot claim attorney client privilege on SEC requested documentation
- Cybersecurity will continue to be a focus area in the near future as the SEC hires more cyber specialists in regional offices
- SEC is pursuing additional exams of certain firms that were part of last year’s Custody Rule exam sweep or Conflicts of Interest sweep
- Second half of 2017 exam initiatives include correspondence exams (phone exams) focused on radio shows and blogs, firms with qualified audit opinions, exams of private funds that should be registered and are not, and RIAs and fund complexes with Target Date Funds,
- Other near term exam initiatives will include ERISA cross trades, EB5 immigration visas as related to registration requirements, conflicts of interest in fixed income funds, and variable products
Since 2006, FrontLine has been successfully guiding its clients through SEC and other regulatory exams. No other compliance support firm, including consulting and law firms, has achieved our 10 year plus record of success in assisting clients with the SEC and other regulators.
For more details on Amy Lynch’s Q&A with the SEC and to request a complimentary assessment, CONTACT us here or call us at 888-518-8070.
