Header graphic for print
Securities Compliance Sentinel Analysis of cutting-edge securities industry issues

What Investment Advisers Need To Know About The SEC

Posted in Compliance and Supervision, Financial Industry Trends, Investment Adviser Regulation, SEC Compliance

money.jpgThe SEC recently announced that its top priority is to increase the number of investment adviser examinations it conducts on an annual basis.  Considering that the SEC only examined 8% of all investment advisers in 2012 (where 40% have never been examined), the SEC could only increase the number of such examinations.

The talk, for the moment, has moved away from the uniform fiduciary duty and designating an SRO for investment advisers.  Instead, the focus is on increasing the budget for the SEC to fund, among other things, its examination process.

The shift in focus back to examinations is only logical.  The debate on the SRO and uniform fiduciary duty standard has taken much time and produced no results.  A reinvigorated examination process will shift the view of the SEC from being do-nothing to do-something.

So what should you expect?  It is likely that the SEC will receive increased funding.  In turn, investment advisers should expect more that 8% being examined in any given year.  

Where that number goes is anyone’s guess, but now is as good a time as any to revisit your compliance policies and procedures.  Make sure your house is in order now, or pay for it later now that the SEC will have the funding and will surely act with a purpose in the examination process.

*photo from freedigitalphotos.net