SEC Creates New Office of Risk Assessment

Similarly, DERA developed a broker-dealer risk assessment tool that helps SEC examiners allocate resources by assessing a broker-dealer’s comparative riskiness relative to its peer group. It also is working closely with the Enforcement Division’s Financial Reporting and Audit Task Force and the Division of Corporation Finance on developing a tool to assist in identifying financial reporting irregularities that may indicate financial fraud and help assess corporate issuer risk.

“The Office of Risk Assessment will build on the existing expertise of DERA’s staff, which includes economists, accountants, analysts, and attorneys, to provide sophisticated assessments of market risks,” said DERA Deputy Director Scott Bauguess, who oversees the division’s risk assessment activities, in a statement. “The establishment of this new office reflects the Commission’s ongoing focus on deploying data-driven analytics to assist in routing scarce resources to areas of the greatest risks to the market.”

DERA will continue to develop and use predictive analytics to support supervisory, surveillance, and investigative programs involving corporate issuers, broker-dealers, investment advisors, exchanges, and trading platforms, as well as support the SEC’s ongoing work related to the Financial Stability Oversight Council, the agency says.