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Topic: OCIE

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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Risk Alert: Examiners on the Lookout for Whistleblower Intimidation

November 4, 2016
Examiners will be checking advisory firm and broker-dealer manuals and documents to make sure they contain no provisions that deter employees from reporting fraud or other problems, the SECís Office of Compliance Inspections and Examinations said in a new risk alert. Firms that want to avoid citation letters or possible enforcement action would be wise to review their policies and procedures before examiners do.

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Inspector General: OCIE Improvements Still Needed

October 21, 2016
The Office of the Inspector General on October 7 said that it was still waiting for the SEC to act on two recommendations it made in a March report to address challenges it found with the Office of Compliance Inspections and Examinations.

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Implement Promised Corrections to Exam Findings … or Face the Consequences

October 14, 2016
The SEC, like Mother Nature, doesnít like to be ignored. So after an investment adviser allegedly failed to make promised corrections to deficiencies found during three examinations conducted over six years, the agency launched an enforcement action.

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OCIE Will Examine Advisory Firm Supervision Practices

September 23, 2016
A new target is now within the crosshairs of SEC examiners: Advisory firm supervision practices. The Office of Compliance Inspection and Examination, in a September 12 risk alert, said it will focus on supervision of employees with a history of disciplinary action.

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Dually Registered Advisers/Broker-Dealers Face Dual Examinations

September 8, 2016
The ability to charge both advisory fees and brokerage commissions may seem like a powerful incentive to become a dually registered adviser/broker-dealer, but there are challenges as well. Among them are that dual registrants have to comply with two standards, two sets of regulations, and Ė perhaps the most problematic Ė face two sets of examiners, one from the SEC, the other from FINRA.

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Solve Social Media Compliance Problems Before Examiners Find Them

August 5, 2016
When SEC examiners visit your firm, expect social media and how it is used by investment staff and other employees to be high on their list of focus areas. The challenges facing chief compliance officers is not only to be prepared for the examination, but to be aware that social media poses a challenge different from many other compliance matters.

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Examiners Scrutinize Adviser Relationships with Broker-Dealers

July 28, 2016
Examiners visiting advisory firms spend increasing amounts of their time these days on cybersecurity and other hot topics du jour. But thatís by no means how they spend all their time. They also look into advisory firm bread-and-butter practices, not least among them relationships with non-affiliated broker-dealers.

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New OCIE Target: Adviser Share Class Recommendations

July 15, 2016
The SECís Office of Compliance Inspections and Examinations has found its next target: Advisers that receive compensation or financial incentives for recommending mutual fund and 529 Plan share classes with substantial loads or distribution fees. OCIE wants to know whether such arrangements involve conflicts of interest, are properly disclosed, and are covered by an advisory firmís written compliance policies and procedures.

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SEC: Adviser’s Lies to Exam Staff Led to Charges of Stealing Athletes’ Money

May 13, 2016
The SEC doesnít like it when advisers lie to agency examiners Ė particularly if the lies cover up theft of client money.

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OCIE Efficiency and Effectiveness Called into Question by SEC Inspector General

March 18, 2016
You might say that the SECís Office of Compliance Inspections and Examinations received a deficiency letter. The SECís Office of the Inspector General on March 10 issued a final report detailing the results of an evaluation it conducted of OCIEís management of investment adviser examination coverage goals Ö and the examination group came up wanting.

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Examiners, Examiners: SEC Would Add More Than 200 by End of FY 2017

February 19, 2016
The SEC appears to be on a roll in its quest to make up for an examiner shortfall. Two recent developments would increase the number of examiners in the Office of Compliance Inspections and Examinations by more than 200 within approximately two years, with the prospect of still more examiner hires further down the line.

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New OCIE Deputy Director Named

February 5, 2016
The SEC named Jane Jarcho as the new deputy director of the SECís Office of Compliance Inspections and Examination.

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SEC Reassigning Broker-Dealer Examiners to Advisers

February 5, 2016
The SEC, perennially short on examiners for the growing number of registered investment advisers, will be adding 100 more to the task as 2016 progresses Ė and a significant percentage of them will be existing examiners that currently focus on broker-dealers. The result may be a significant increase in the frequency of investment adviser examinations.

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Liquidity Controls, Cybersecurity, ETFs Among OCIE’s 2016 Exam Priorities

January 15, 2016
Expect the SECís Office of Compliance Inspections and Examinations to scrutinize new areas like liquidity controls and exchange-traded funds in the coming year, while at the same time moving its focus in areas like cybersecurity to a new phase. OCIE last week, in what has become an annual ritual, issued its annual examination priorities.

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Two Strikes: Adviser in Custody Case Faces Harsher Penalties the Second Time Around

December 4, 2015
Five years ago, the SEC settled with an adviser by charging the firm $60,000. Last month, when the agency settled with the adviser again in regard to similar violations, the SEC was a bit harsher: It raised the fine to $1 million, required the retention of a compliance monitor, set daily penalties for future failures to comply, and suspended the firm from the industry for a year.

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Private Funds: Low Systemic Risk, High Operational and Management Risk

October 23, 2015
The SEC has delivered a private fund one-two punch: systemic risks from private funds due to high leverage and too much reliance on derivatives are not as great as some feared, but risks from operational and management issues within advisory firms and the private funds they manage are significant and need to be policed.

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