MyComplianceOffice Blog

The United States Securities and Exchange Commission's Division of Examinations  Risk Alert: Observations from Examinations of Newly-Registered Advisers covers the regulator’s typical focus areas and common observations. The Alert warns newly-registered advisers to pay close attention to the firm’s compliance policies and procedures, disclosures and marketing practices – advice that well-established firms should be heeding as well.

The U.S. Securities and Exchange Commission adopted proposed amendments to Rule 10b5-1 to enhance disclosure requirements and investor protections against insider trading. According to the SEC release, "the final rules aim to strengthen investor protections concerning insider trading and to help shareholders understand when and how insiders are trading in securities for which they may at times have material nonpublic information."

The Division of Examinations of the U.S. Securities and Exchange Commission recently released a Risk Alert to provide an overview of compliance issues observed in examinations of registered investment advisers that manage private funds. The alert covered areas including conflicts of interest when actions are inconsistent with disclosures and noted the importance of policies and procedures.

According to the U.S. Securities and Exchange Commission’s 2021 Examination Priorities, in the  last five years the number of Registered Investment Advisers the SEC Division of Examinations oversees increased from about 12,000 to more than 13,900, and the assets under management of RIAs increased from approximately $67 trillion to $97 trillion.

Because of the totality of assets managed, RIAs are always going to be a priority for the SEC. Examinations are not going anywhere. The Division has made significant process, staffing and technology updates to keep up with the growth and increase RIA coverage. In 2020, a year where COVID forced a mid-year switch to remote examinations, Division coverage of RIAs was 15%.

The U.S. Securities and Exchange Commission (SEC) recently released its Annual Agenda for 2021. The Agenda provides a list of Rules in the Prerule, Proposed, and Final stages and offers a snapshot of the SEC’s long and short term regulatory priorities.