2014 Examination Priorities of the US SEC’s Office of Compliance Inspections and Examinations

February 05, 2014

The Securities and Exchange Commission (SEC) on January 9, 2014 announced its examination priorities for 2014. The priorities address: (i) market-wide issues, including fraud detection and prevention, corporate governance, technology controls and recent legal and regulatory developments; and (ii) specific issues relating to each of the four areas covered by the National Exam Program (NEP): (i) investment advisers and investment companies; (ii) broker-dealers; (iii) market oversight; and (iv) clearing agencies and transfer agents. The NEP is overseen by the SEC’s Office of Compliance Inspections and Examinations (OCIE).

The annual list of examination priorities highlights issues that OCIE considers “to have heightened risk.” Issues are identified based on various factors, including: (i) information reported by registrants in required SEC filings; (ii) information obtained through regulatory examinations; (iii) communications with other regulatory agencies; (iv) interactions with registrants and others outside the scope of an examination; (v) comments and tips; (vi) data kept in third-party databases; and (vi) industry and media publications. Andrew J. Bowden, Director of OCIE, stated that publishing the examination priorities would help “to increase transparency, strengthen compliance, and inform the public and the financial services industry about key risks that [OCIE is] monitoring and examining.” The SEC noted, in an accompanying press release, that the listed priorities “are not exhaustive and may be adjusted throughout the year in light of ongoing risk assessment activities.” As such, registrants should expect that examinations will not be limited to the issues highlighted in the list of examination priorities.

Read "2014 Examination Priorities of the U.S. SEC’s Office of Compliance Inspections and Examinations."