Articles Tagged with Surveillance

As part of its overall goal to increase its ability to examine registered investment advisers, earlier this month the Security and Exchange Commission (“SEC”) announced that it has created a new office within the Office of Compliance Inspections and Examinations (“OCIE”) designed to consolidate the SEC’s current operation in the area of market surveillance, quantitative analysis and risk assessment.  The newly created office — the Office of Risk and Strategy — will also provide operational risk management and organizational strategy for OCIE.  The SEC also announced that it had selected Peter B. Driscoll to lead the new Office of Risk and Strategy.  He will manage members of the investment advisor/investment company examination staff dedicated to the new office.

The SEC currently examines annually about 10% of all 11,000 registered investment advisers.  The newly created Office of Risk and Strategy is part of a series of steps designed to heighten RIA oversight.  The SEC has announced that it plans to in increase the number of examiners of investment advisers by almost 20% this year, bringing the number to 630. Informally, commissioners have also suggested that the Commission may require RIAs to hire third parties to conduct private compliance reviews.

For many years, and to an increasing degree over the past few years, the SEC’s examination program has been driven by risk evaluations derived in part from data-driven surveillance and reviews.  According to the director of OCIE, Marc Wyatt, the new Office of Risk and Strategy will lead the SEC’s existing risk-based, data-driven exam program in a way which he describes will bring a “transparent approach to protecting investors.”  Continue reading ›

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