The SEC met its stated fiscal year 2016 goal by examining 11 percent of the investment adviser pool. The SEC released the results as part of its annual Summary of Performance and Financial Information.
That number presents a one percent uptick from fiscal year 2015.
Out of the estimated pool of 12,200 investment advisers, that amounts to roughly 1,342 advisers that were covered. Under recently departed SEC Chair Mary Jo White, the SEC shifted personnel from broker exams and explored third-party exams as a way to boost its examination efforts. It’s not known whether that initiative will be pursued by incoming SEC leadership.
However, in January’s National Exam Program Exam Priorities 2017 release, the SEC said it would be expanding its “Never-Before Examined Adviser initiative” to include focused, risk-based examinations of newly registered advisers as well as selected advisers that have been registered for a longer period but have never been examined by OCIE.
Despite the seemingly low number of advisers looked at in 2016, many advisers receive some touch from SEC examiners. During Ascendant’s recent ComplianceCast, “SEC Exam Priorities: What’s Between the Lines & Behind the Scenes,” 74 percent of attendees said their firms have been examined by the Commission.
The SEC cast a wider net on investment companies, examining 17 percent of them in fiscal 2016, exceeding the internal 15 percent projection. Meanwhile, broker-dealers saw 50 percent coverage.
Inside the SEC Exam Program
The SEC’s Exam Program will be a major focus of Ascendant’s upcoming conference on April 3-5 in Naples, Florida, taking attendees through a typical exam journey, highlighting lessons we’ve learned in the field alongside compliance teams and regulators. We’ll go through all the essentials, from how to respond to the SEC’s information requests to handling the in-person interactions to the exit interview and responding to a findings letter. Here’s a look at our SEC Exam track. For more information on the conference, click here.
SEC Exam Track Sessions
- Special Presentation: SEC Data Analysis of Investment Managers
- SEC Exam Part 1: First Day Letter & Exam
- SEC Exam Part 2: What Happens When Regulators Are in Your Office
- SEC Exam Part 3: The Exit Interview and Responding to a Findings Letter
- What You Still Want to Know About SEC Exams
Written by: Ascendant Compliance Management