While the total number of deficiencies uncovered during advisor exams conducted by state securities regulators dropped 30% in 2015 from those reported in 2013, state-registered advisors’ biggest infractions continue to be in keeping their books and records.
According to data released Monday by the North American Securities Administrators Association, the 1,170 reported state examinations uncovered 4,983 deficiencies in 22 compliance areas, down 30% from the 6,482 deficiencies in 20 compliance areas reported in 2013.
State securities examiners voluntarily report sample data every two years from their investment advisor exams to NASAA’s Investment Adviser Operations Project Group.
The 2015 sample examination data was provided by 42 jurisdictions between January and June 2015.
Books and records continue to be the most problematic compliance area for state-registered investment advisors, accounting for more than twice as many deficiencies found by state examiners as the next highest problem area, which involved contracts.