The SEC said there are several areas of heightened risk that theagency plans to examine this year, including sales practices andfraud at broker-dealers.

The examination priorities address issues that span the entiremarket as well as issues that relate specifically to particularbusiness models and organizations, according to the SEC. Priorities in each program area include:

  • For investment advisers and investment companies — presenceexams for newly registered private fund advisers, and payments byadvisers and funds to entities that distribute mutual funds;
  • For broker-dealers — sales practices and fraud, and compliance withthe new market access rule;
  • For market oversight — risk-based examinations of securitiesexchanges and FINRA, and order-type assessment;
  • For clearing and settlement — for transfer agent exams, timelyturnaround of items and transfers, accurate recordkeeping, andsafeguarding of assets. For clearing agencies designated assystemically important, conduct annual examinations as required bythe Dodd-Frank Act.

The SEC said the agency's senior exam staff, management from theSEC's 12 regional offices, and other SEC divisions and officesselected the examination priorities for 2013 in consultation witheach of the commissioners, based upon a variety of information andrisk analytics, including:

  • Tips, complaints and referrals, including from whistleblowers, customers and investors;
  • Information reported by registrants in required filings withthe commission;
  • Information gathered through examinations conducted by the SECand other regulators;
  • Communications with other U.S. and international regulators andagencies;
  • Industry and media publications;
  • Data maintained in third-party databases;
  • Interactions with registrants, industry groups, and serviceproviders (outside of examinations.)

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