The SEC said there are several areas of heightened risk that the agency plans to examine this year, including sales practices and fraud at broker-dealers.
The examination priorities address issues that span the entire market as well as issues that relate specifically to particular business models and organizations, according to the SEC. Priorities in each program area include:
- For investment advisers and investment companies — presence exams for newly registered private fund advisers, and payments by advisers and funds to entities that distribute mutual funds;
- For broker-dealers — sales practices and fraud, and compliance with the new market access rule;
- For market oversight — risk-based examinations of securities exchanges and FINRA, and order-type assessment;
- For clearing and settlement — for transfer agent exams, timely turnaround of items and transfers, accurate recordkeeping, and safeguarding of assets. For clearing agencies designated as systemically important, conduct annual examinations as required by the Dodd-Frank Act.
The SEC said the agency’s senior exam staff, management from the SEC’s 12 regional offices, and other SEC divisions and offices selected the examination priorities for 2013 in consultation with each of the commissioners, based upon a variety of information and risk analytics, including:
- Tips, complaints and referrals, including from whistleblowers, customers and investors;
- Information reported by registrants in required filings with the commission;
- Information gathered through examinations conducted by the SEC and other regulators;
- Communications with other U.S. and international regulators and agencies;
- Industry and media publications;
- Data maintained in third-party databases;
- Interactions with registrants, industry groups, and service providers (outside of examinations.)
