The Securities and Alternate Fee’s Division of Examinations not too long ago launched its 2024 priorities, figuring out the important thing dangers and matters for the approaching 12 months. The SEC publishes these priorities to encourage corporations to focus compliance efforts on these areas.
The under shouldn’t be an exhaustive listing of what is likely to be targeted on throughout an examination. Entity historical past, operations, companies, merchandise supplied and different threat components are all inside scope. I sat down with colleague Thomas Kellerman to be taught extra concerning the SEC’s introduced priorities.
RIA Exams
Advisors have to be conscious that funding recommendation relating to complicated, illiquid and unconventional merchandise will likely be scrutinized in addition to recommendation suited to older traders saving for retirement.
Additionally, processes for figuring out that funding recommendation is supplied in shoppers’ greatest curiosity will likely be reviewed. Examinations will tackle how advisors mitigate conflicts of pursuits and allocate investments to sure accounts, reminiscent of wrap price, non-taxable and brokerage fee.
Particularly, examination focus will embody advertising follow assessments for whether or not advisors have: (1) adopted and applied moderately designed written insurance policies and procedures to stop violations of the Advisers Act and the foundations thereunder together with reforms to the Advertising and marketing Rule; (2) appropriately disclosed their marketing-related data on Kind ADV; and (3) maintained substantiation of their processes and different required books and information.
Advertising and marketing critiques of disseminated commercials (hypothetical efficiency, third-party rankings, testimonials) will proceed to happen.
