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June 27, 2011 at 10:56 AM
The new head of the Securities and Exchange Commission’s national broker-dealer exam program said Monday that two big areas of focus for the SEC are variable annuities and firms’ supervisory policies.
Variable annuities “are a big focus” for the SEC, said Julius Leiman-Carbia, associate director and head of the National Broker-Dealer Examination program in the SEC’s Office of Compliance Inspections and Examinations (OCIE), with 12% of SEC exams focusing on VAs. Leiman-Carbia, who was appointed to his position in April, oversees approximately 300 lawyers, accountants and examiners responsible for the inspections of U.S.-based broker-dealers.
Suitability is another big issue, Leiman-Carbia said, “not only with products but with practices and procedures.” This highlights a bigger issue, he said, “which is one of supervision.” While it’s “sometimes hard” for firms to supervise all of their representatives in various locations, “supervision is extremely important—to know what is going on at the regional and community level.”
Leiman-Carbia noted that OCIE’s “more robust” exam program—which focuses on risk assessment—has included more collaboration among the regional and national offices. The regional offices “know the players and the profile of firms,” he said, “so we need to identify the risks that come out of the regions and assess how [those risks] will have a national impact.”
Both Leiman-Carbia and Mike Rufino, chief operating officer, member regulation sales practice at the Financial Industry Regulatory Authority (FINRA), participated in a panel discussion at the Insured Retirement Institute’s (IRI) regulatory affairs conference in Washington on Monday.
