OCIE Releases 2014 Exam Priorities

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On January 9, the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) issued its annual “hot-topics” list of examination priorities for 2014.

National Exam Program Priorities across OCIE’s entire program include:
1. Fraud Detection & Prevention
2. Corporate Governance, Conflicts of Interest & Enterprise Risk Management
3. Technology
4. Dual Registrants (BD & RIA)
5. New Laws & Regulation

  • Rule 506(c) Accredited Investors
  • Crowd-funding
  • Municipal Advisors
  • New Registrants under Dodd-Frank

6. Retirement Vehicles & Rollovers (IRA & 401k) suitability, conflicts, etc.

Investment Advisor / Investment Company specific initiatives include:

Core:
1. Asset Safety & Custody
2. Conflicts Inherent in Business Models
3. Market Performance Claims and Disclosures

New Issues:

4. New, Un-Examined Advisors
5. Wrap-Fee Programs
6. Quantitative Trading Models
7. Presence Exams
8. Payments for Distribution in Guise
9. Fixed Income Investment Companies

Policy:

10. Money-Market Funds
11. “Alternative” Investment Companies
12. Securities Lending

Broker-Dealer initiatives include:

Core:
1. Sales Practices / Fraud (affinity; micro-cap; unsuitable products)
2. Supervision
3. Trading, especially HFQ and algorithmic trading
4. International Controls
5. Financial Responsibility
6. AML

New Issues
7. Market Access Rule 15c3-5
8. Suitability of VA Buybacks
9. Fixed Income Market

Market Oversight initiatives included:

1. FINRA Oversight
2. Exchange Exams
3. New Registrants, including security-based swaps execution facilities
4. Section 31 Fee Exams

Clearing & Settlement initiatives include:

Clearing:
1. Dodd-Frank Mandated Exams (DTC; NSCC; IFCC: OCC)
2. Rule 17Ad-22 Compliance
3. New Registrants

Transfer:
1. Transfer Agent Core Activities
2. Other Areas: Microcap; 3rd Party Administration
3. Direct Registration
4. Business Continuity and Disaster Recovery Plans

Topics:  Compliance, Enforcement, Investigations, OCIE, SEC

Published In: Finance & Banking Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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