Carlo di Florio, the director now for 13 months of the SEC’s Office of Compliance, Inspections and Examination (OCIE), said Friday that considering the budget difficulties faced by the Commission, that “we’re spending a lot of time picking our spots” when it comes to examining RIAs.
One way OCIE is doing that, he said in a lunchtime speech and in a separate interview at the Investment Adviser Association (IAA) compliance conference in Washington, was using the tactical expertise in the SEC’s new Risk Analysis and Surveillance Unit to help implement the strategic focus from the Commission’s division of Risk, Strategy, and Financial Innovation to identify and then examine higher-risk firms.
That allows OCIE, he said, to “develop the models that allow us to look at risk in a more sophisticated” manner. Di Florio, a soft-spoken attorney who joined the Commission in January 2010 from PricewaterhouseCoopers, where he was a partner in PWC’s Financial Services Regulatory Practice, said in the interview that “the SEC has been struggling with our budget for the last couple of years,” so “we have to be more risk-focused.”
Di Florio said that “with the funding we had last year, we were able to bring lots of talent” to allow the SEC to oversee sophisticated financial instruments like structured products. “We hope to be able to continue recruiting” that kind of talent, he said.
Di Florio mentioned the recent appointment of former Goldman Sachs global CIO Eileen Rominger (right) as the director of investment management as an example of the kind of talent that Chairman Mary Schapiro has been attracting to the Commission, where the culture of the SEC is changing under Schapiro’s leadership.