The recent SEC release of exam priorities serves as a helpful reminder that broker-dealer (BD) and investment advisory (IA) firms should ensure they are prepared when the SEC comes knocking. Below are some steps that you may want to consider in preparing for an SEC exam:
- Perform a review of the firm’s required books and records and correct any gaps.
- Identify any prior issued deficiencies and ensure stated corrective action was taken and deficiencies have been eliminated.
- Review the firm’s risk assessment to ensure all firm risks and conflicts have been identified.
- Review firm’s written policies and procedures and internal controls to ensure they address all identified risk areas and current applicable regulations (including those outlined in the SEC list of exam priorities).
- Meet with senior managers and perform SEC mock interviews to help them become acquainted with the process and identify any potential issues.
- Train employees on steps to be taken when undergoing a regulatory exam.
- Obtain a list of the core documents and information requested during an exam by the SEC and FINRA (maintained on respective websites) and create and maintain compliance files with current copies of same.
- Perform reviews of SEC and FINRA websites to keep abreast of new regulations, compliance alerts and enforcement actions.
Being prepared for an SEC exam generally equates to a smoother process and less time the regulators spend examining your firm. For help on this subject or on other compliance topics, please contact us at (619) 278-0020, or email us at firstname.lastname@example.org.