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Topic: OCIE

Fees and Expenses: OCIE Wants Advisers to Focus on the Nuts and Bolts

April 20, 2018
Sometimes itís the basic things that get overlooked, like fees and expenses. When that happens in the asset management community, problems occur and examiners notice Ė which may be why the SECís Office of Compliance Inspections and Examinations this month issued a Risk Alert offering an "Overview of the Most Frequent Advisory Fee and Expense Compliance Issues Identified in Examinations of Investment Advisers." Chief compliance officers would be wise to pay attention.

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Exam Referrals to Enforcement: How Much Should Advisers Worry?

April 13, 2018
Itís every advisory firmís nightmare. SEC examiners visit, find some deficiencies and suggest some corrective actions, which the adviser makes. Some months later, the advisory firm learns that it is the subject of a Division of Enforcement investigation, based on a referral from the exam team.

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OCIE Expects to Maintain 15 Percent Adviser Exam Rate in 2018 and 2019

March 9, 2018
The SECís Office of Compliance Inspections and Examinations achieved a historic rise when examiners visited 15 percent of advisory firms in fiscal year 2017, up from 11 percent the year before. It expects this rate to hold steady through the next two fiscal years, according to its annual performance report.

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2018 SEC Examination Priorities: Cryptocurrency Joins Cybersecurity, Retail and Disclosure

February 9, 2018
The SECís Office of Compliance Inspections and Examinations on February 7 finally issued what advisory firms, investment companies, broker-dealers, attorneys, consultants and others in the asset management community have been waiting for since mid-January: its 2018 list of examination priorities. This yearís list was marked by two additions: a more polished presentation and the inclusion of cryptocurrency as a priority.

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PF Manager Settles Charges Involving Conflicts, Disclosure and Exam Findings

January 5, 2018
A private fund manager that the SEC accused of not acting in a timely fashion on multiple examination findings was taken to federal court by the agency, which charged him with, among other things, engaging in conflicted transactions and misleading investors. The manager, Louis Mohlman, Jr. and his two advisory firms reached a settlement with the SEC the same day.

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OIG Turns Spotlight on SEC Exam Program, Data Center Management Problems

December 8, 2017
Every six months, the SECís Office of the Inspector General issues a report to Congress in which it updates its progress in investigating aspects of the Commissionís activities. In its latest report, released December 1, the watchdog arm of the SEC takes aim at, among other things, the Office of Compliance Inspections and Examinationsí investment adviser exam controls, and the agencyís management of its data centers

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OCIE Turns the Spotlight on Municipal Adviser Compliance Failures

November 10, 2017
The SECís Office of Compliance Inspections and Examinations on November 7 issued a Risk Alert based on its observations from examinations of municipal advisers. The observations make clear that OCIE finds compliance lacking in at least three key areas: registration, recordkeeping and supervision.

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OIG to SEC: Improve Information Security, Regulatory Oversight, Contract Management

October 13, 2017
When it rains, it pours. A little more than two weeks after the SEC began dealing with the public fallout from the cyber breach of one of its key electronic systems, its Office of the Inspector General issued its annual statement on the agencyís management and performance challenges. While the statement identified some progress the SEC made in addressing these challenges, it found significant areas for improvement.

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OCIE Finds Increased Cybersecurity But Wants More

August 11, 2017
The SECís Office of Compliance Inspections and Evaluations on August 7 made public its observations from its most recent round of cybersecurity exams Ė and what it found is encouraging only to a point. The message delivered by OCIE in its National Exam Program risk alert was this: Advisory firms, broker-dealers and investment companies have made strides in providing cybersecurity, but there is still a long way to go.

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SEC Conducting Unannounced Examinations

August 11, 2017
At least one of the SECís regional offices is conducting unannounced examinations on investment advisers Ė and other SEC offices may notice and follow suit.

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Capital Formation, Enforcement, Exams Rank High as Clayton Urges Budget Approval

July 14, 2017
SEC chairman Jay Clayton has begun the process of putting his mark on the SEC, its activities, and the perceptions of those it regulates. In addition to his "principles" speech in New York City on July 12, he recently appeared before Congress to justify the agencyís $1.6 billion budget request for fiscal year 2018.

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Electronic Messaging May Be Subject of New Sweep Examination

July 7, 2017
Advisory firms should consider preparing for what may be a new SEC sweep exam: electronic messaging. While it is not yet certain that such sweep exams have begun or are scheduled to begin, advisers would be wise to review their policies and procedures, as well as how they use and document such forms of communication as instant messaging, text/SMS messaging, emails sent and received on non-company systems, and personal or private messaging.

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OCIE Under Examination by Office of Inspector General

May 19, 2017
The SECís Office of Inspections and Examinations is finding out right now what it feels like to be put under the microscope. The question is: Will it pass or receive a deficiency letter of its own?

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Ransomware Attack: OCIE Urges Asset Managers to Take Preventive Measures

May 19, 2017
The ransomware assault playing havoc with organizations globally this month has not gone unnoticed by the SEC. It issued a risk alert on May 17 urging advisers, investment companies and broker-dealers to not only keep current with the latest developments about the ransomware attack, but conduct cyber-risk assessments, penetration tests, and ensure they are maintaining their IT systems.

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Examiners Coming? Here’s What Not to Do

April 21, 2017
Itís stressful enough to go through an SEC examination, without adding fuel to the fire by doing things that only make deficiencies or a referral to the Division of Enforcement more likely. Yet it is not uncommon for advisory firm employees to do just that, with actions ranging from merely embarrassing to self-incriminating. Guard against that danger by making sure your exam preparations cover not only how employees should interact with examiners, but how they shouldnít.

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Examination of Advisers and Funds Up 20 Percent in FY 2016 Over Previous Year

March 9, 2017
Mary Jo White must have been particularly pleased with this statistic before she left office as SEC chair last month: The number of investment advisers and investment companies examined by the agencyís Office of Compliance Inspections and Examination in FY 2016 increased by more than 20 percent over the number examined in FY 2015.

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OCIE Identifies Top 5 Compliance Problem Areas Found in Exams

February 10, 2017
Advisers receiving a deficiency letter after an examination identifying certain compliance areas where the SEC found them lacking may take some comfort in knowing they are not alone Ė particularly if those areas involve the Compliance Program Rule, required regulatory filings, the Custody Rule, the Code of Ethics Rule or the Books and Records Rule. The agencyís Office of Compliance Inspections and Examinations on February 7 issued a Risk Alert, "The Five Most Frequent Compliance Topics Identified in OCIE Examinations of Investment Advisers."

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Examination Findings Led to Court Actions Against Platinum’s Founder

January 27, 2017
Platinum Partners received quite a bit of negative publicity since the civil and criminal charges against the hedge fund managerís founder and two of its subsidiary advisory firms in U.S. District Court last month. But perhaps less publicized was that much of the enforcement action began after an SEC examination found evidence of wrongdoing.

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SEC 2017 Exam Priorities: Robo-Advisers, Money Market Funds, Cybersecurity

January 13, 2017
The SECís Office of Compliance Inspections and Examinations, in what has become something of an annual rite, on January 12 issued its 2017 Examination Priorities list. While many of the targets are similar to those listed in 2016, one new priority this year is electronic investment advice.

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Branch Office Examinations: What OCIE Wants to Know

December 30, 2016
When the SECís Office of Compliance Inspections and Examinations listed branch offices in its 2016 target list last January, it didnít put much meat on the bones as to what examiners would be looking for, other than to say that they would "review regulated entitiesí supervision of registered representatives and investment adviser representatives." A recent Guidance Alert from OCIE now spells out what advisory firms can expect.

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