On January 9, the SEC's Office of Compliance Inspections and Examinations ("OCIE") issued its annual "hot-topics" list of examination priorities for 2014.
National Exam Program Priorities across OCIE's entire program include: 1. Fraud Detection & Prevention 2. Corporate Governance, Conflicts of Interest & Enterprise Risk Management 3. Technology 4. Dual Registrants (BD & RIA) 5. New Laws & Regulation
- Rule 506(c) Accredited Investors
- Crowd-funding
- Municipal Advisors
- New Registrants under Dodd-Frank
6. Retirement Vehicles & Rollovers (IRA & 401k) suitability, conflicts, etc.
Investment Advisor / Investment Company specific initiatives include: Core: 1. Asset Safety & Custody 2. Conflicts Inherent in Business Models 3. Market Performance Claims and Disclosures New Issues: 4. New, Un-Examined Advisors 5. Wrap-Fee Programs 6. Quantitative Trading Models 7. Presence Exams 8. Payments for Distribution in Guise 9. Fixed Income Investment Companies Policy: 10. Money-Market Funds 11. "Alternative" Investment Companies 12. Securities Lending
Broker-Dealer initiatives include: Core: 1. Sales Practices / Fraud (affinity; micro-cap; unsuitable products) 2. Supervision 3. Trading, especially HFQ and algorithmic trading 4. International Controls 5. Financial Responsibility 6. AML New Issues 7. Market Access Rule 15c3-5 8. Suitability of VA Buybacks 9. Fixed Income Market
Market Oversight initiatives included: 1. FINRA Oversight 2. Exchange Exams 3. New Registrants, including security-based swaps execution facilities 4. Section 31 Fee Exams
Clearing & Settlement initiatives include: Clearing: 1. Dodd-Frank Mandated Exams (DTC; NSCC; IFCC: OCC) 2. Rule 17Ad-22 Compliance 3. New Registrants Transfer: 1. Transfer Agent Core Activities 2. Other Areas: Microcap; 3
rd Party Administration 3. Direct Registration 4. Business Continuity and Disaster Recovery Plans
For more information on securities litigation topics, please contact one of the Burr & Forman team members for assistance. We are happy to answer any questions or concerns you may have.
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