The Securities and Exchange Commission will conduct “presence” exams of never-examined advisors this year, and will also focus its exam efforts in three areas: protecting investors, particularly those in or near retirement; market structure issues like cybersecurity; and using data analytics to identify those engaged in illegal activity, the agency’s exam chief, Andrew Bowden, said Wednesday.
Speaking Wednesday at the Practising Law Institute’s Hedge Fund Compliance & Regulatory Challenges 2015 conference in New York, Bowden said that he expects the SEC’s exam priorities list to be released next week, and that the SEC’s Office of Compliance, Inspections and Examinations will “expand” the presence exams it used to examine newly registered private fund advisors to never-examined advisors.
The Financial Industry Regulatory Authority released its exam priorities letter Tuesday.
OCIE announced last February that it would zero in on advisors who have never been examined and conducted an exam sweep of such advisors through its Never-Examined Advisor Initiative. The initiative was directed at never-examined advisors registered with the SEC for three or more years.
Bowden said in September that advisors in the never-examined advisor category total about 1,000, and that 225 firms have been examined thus far, with “more [exams] underway.”
The Dodd-Frank Act, passed in 2010, required advisors to many private funds to register with the SEC by March 30, 2012. OCIE announced in October 2012 that it would be conducting “presence” exams of private fund advisors.