To start the new year, the Securities and Exchange Commission’s (“SEC’s”) Office of Compliance Inspections and Examinations (“OCIE”) released its 2014 National Examination Program Priorities. The purpose of this announcement, according to OCIE, is to “communicate with investors and registrants about areas that the staff perceives to have heightened risk”, as well as to “maintain fair, orderly, and efficient markets” and “facilitate capital formation.” This blog highlights a few of the key “hot topics” of focus for 2014. Among the key broad issues in the year 2014 for OCIE’s National Examination Program are fraud detection/prevention, corporate governance, technology, dual registrants, and retirement vehicle and rollovers. Evaluating a firm’s adherence to new regulations is of particular focus to the SEC during its exams. For 2014, this will include Rule 504(c) of the Securities Act of 1933 (general solicitation practices and accredited investor status verification), registration of municipal advisors, and crowdfunding.
The release also breaks down “Program Area-Specific Initiatives” based on the investment adviser (IAs) and broker-dealer (BD) spheres of the financial industry, among others. The OCIE’s “New and Emerging Initiatives” for IAs and investment companies include:
- Never-before-examined advisers;
- Wrap fee programs;
- Quantitative trading models;
- Presence exams;
- Payments for distribution in guise; and
- Fixed-income investment companies.
The 2014 “New and Emerging Initiatives” for the BD exam program include:
- The Exchange Act Rule 15c3-5 (also called the Market Access Rule);
- Suitability of variable annuity buybacks; and
- Fixed income markets.
For more information, or for assistance on other compliance topics, please contact us at (619) 278-0020 to schedule a consultation.
GENERAL DISCLAIMER: Information contained within this blog does not create a business-client relationship, and none of the content of this blog can be deemed to be consultive business advice.