“Risks applicable to investment advisers continue to be a high priority focus for the Securities and Exchange Commission (“SEC”). To that end, the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) is tasked with the responsibility of, among other things, monitoring risk applicable to its registrants. In the release of the SEC’s 2017 examination priorities,1 OCIE’s then Director Marc Wyatt stated, “OCIE’s priorities identify where we see risk to investors so that registrants can evaluate their own compliance programs in these important areas and make necessary changes and enhancements.”
Since 2011, OCIE has been issuing written “Risk Alerts” to the financial industry covering certain risk areas they’ve identified though examinations of registrants. To date, they have published 24 Risk Alerts2 with almost half of those being issued in 2015 and 2016. In this month’s Risk Management Update, we discuss some of the higher priority risk areas pertaining to investment advisory firms and also provide guidance on addressing these risks and outline steps for implementing an effective risk assessment and monitoring program.”
To read more of this Risk Management Update, click here for a free PDF copy.