SEC’s Exam Priorities Offer Insight Into National Exam Program

On February 7, 2018, the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) issued their 2018 Examination Priorities (see Ascendant’s summary here). In addition to defining their examination priorities for the year, the OCIE staff offered some insight into the National Exam Program.  Specifically, they defined the following five principles in executing their exam priorities:

  • Risk-based – OCIE realizes that the size of the securities industry prevents them from conducting regular, comprehensive examinations of every firm. The staff considers risk in setting priorities, selecting firms to examine and determining the scope of exams.
  • Data-driven – OCIE acknowledges that they utilize data in setting priorities and evaluating risk. Over the past several years, the SEC has added quantitative capabilities for analyzing trade blotters and market data.
  • Transparency – OCIE believes that publicly sharing information about the exam program enables firms to achieve compliance with the securities laws, thus helping investors. In fiscal year 2017, OCIE published six Risk Alerts, which identified issues for registrants to consider.
  • Highest and Best Use of Resources – OCIE recognizes that their resources are limited, and attempts to leverage their talent, technology and data analysis in an effort to maximize the benefit to investors.
  • Embrace Innovation and Technology – Technology in the financial markets often leads to innovation in ways that benefit investors, such as improving access or driving down cost. OCIE works to keep pace with advancing technological innovations and recognizes the threats through cybersecurity attacks.

Look familiar? In many ways, these principles are the hallmarks of an effective compliance organization. As OCIE has focused on increasing transparency, advisers and broker-dealers will be well served to pay attention to OCIE’s guidance and make sure that their compliance programs are up to par.

OCIE’s full priorities paper can be found here.


If you need help with your compliance program, Ascendant’has technological and consulting solutions to fit every business and budget. Contact us today via email or at 860-435-2255.

Related Content

Latest Content

OCIE Examined 15% of RIAs in 2017

In 2017, the SEC examined 2,114 investment advisers, approximately 15 percent of the 14,000+ registered investment advisers, the SEC confirmed in its Fiscal Year 2019 Congressional Budget Justification Annual Performance Plan. In the same report, the SEC said the staff will continue to improve its efforts of RIAs, noting that nearly 35 percent of all … Continued

Ascendant’s Adam DiPaolo Discusses Hypothetical & Model Performance Marketing Pitfalls

A Jan. 12 article in HFMCompliance titled “Best practice for hedge funds using hypothetical and model performance” outlines best practices for hedge fund managers when using hypothetical performance or model data in marketing efforts, and how managers relying on such data can avoid enforcement actions. Adam DiPaolo, Senior Consultant in Ascendant’s Private Funds group, is quoted in the … Continued

SEC Updates: ICO Gatekeeper Standards, SEC/CFTC Swap Rules

SEC Chairman Jay Clayton had some stern advice for market professionals, especially gatekeepers, who he said need to act responsibly and hold themselves to high standards. Speaking via videoconference during Securities Regulation Institute’s recent annual conference, he said, “To be blunt, from what I have seen recently, particularly in the initial coin offering (“ICO”) space, they … Continued

Mailing List

Subscribe to the Ascendant Compliance email list for the latest compliance resources, conferences, ComplianceCasts™, and more.

Loading form...

Contact Us

Ascendant works together with clients to identify and assess critical needs through customized plans. If you need assistance with compliance functions, regulatory services, cybersecurity or technology tools, we’d love to speak with you.