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Topic: OCIE

OCIE Turns the Spotlight on Municipal Adviser Compliance Failures

November 10, 2017
The SEC’s 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 agency’s 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 SEC’s Office of Compliance Inspections and Evaluations on August 7 made public its observations from its most recent round of cybersecurity exams – 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 SEC’s regional offices is conducting unannounced examinations on investment advisers – 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 agency’s $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 SEC’s 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
It’s 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 shouldn’t.

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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 agency’s 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 – 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 agency’s 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 manager’s 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 SEC’s 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 SEC’s Office of Compliance Inspections and Examinations listed branch offices in its 2016 target list last January, it didn’t put much meat on the bones as to what examiners would be looking for, other than to say that they would "review regulated entities’ 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 SEC’s 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, doesn’t 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 – perhaps the most problematic – 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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