Now that summer has come to its unofficial end, it seems as though the SEC forgot to check its calendar back I May because it has been conducting exams at a breakneck pace as reported in the Investment News. These exams have focused, in part, on those investment advisors who have never been examined.
You may recall at the beginning of the year that the SEC made it an exam priority to focus on investment advisors who, for one reason or another, have never been subject to an examination. The SEC has targeted about 1,000 of those entities, which should represent about a quarter of the 15% of all investments advisors who have never been examined.
For one, it is a clear message that you should jump start the review of your operation. Are your WSPs up to date? Have you reviewed your policies and procedures regarding AML, custody of client funds, use of social media, and avoidance of insider trading?
If the answer to any of these questions is no, now is the time to take preventative action and revisit these, among other issues, to make sure that your house is in order. Either you do it now, or have the SEC do it for you later. The decision is yours.
* photo from freedigitalphotos.net