The SEC’s Office of Compliance Inspections and Examinations (“OCIE”) announced its 2020 examination priorities on January 7, 2020. OCIE releases this list on an annual basis in order to provide the industry with insights into areas it may focus on thorough the examination process. All the priorities listed on the 2020 list were also on the 2019 list, with some new additions. Which makes us wonder if anything will ever be taken off the list, or if there will just be new additions? Only time will tell.
Here is a list of the 2020 exam priorities.
- Retail Investors, Including Seniors and Individuals Saving for Retirement
- Information Security
- Financial Technology and Innovation, Including Digital Assets and Electronic Investment Advice (new for 2020)
- Additional Focus Areas Involving Registered Investment Advisers and Investment Companies
- Additional Focus Areas Involving Broker-Dealers and Municipal Advisors
- AML Programs
- Market Infrastructure
- Focus on FINRA and MSRB
In addition to the exam priorities, OCIE’s report also included these interesting statistical facts:
- OCIE completed 3,089 examinations in fiscal year 2019, compared to 3,150 in fiscal year 2018.
- OCIE issued more than 2,000 deficiency letters in fiscal year 2019.
- Over the past 5 years, the number of registered investment advisers (“RIAs”) overseen by OCIE increased from about 11,500 to 13,475.
- OCIE has increased its examination coverage of RIAs from 10% in fiscal year 2014 to a high of 17% in fiscal year 2018. Coverage in fiscal year 2019 was 15%.
At Joot, a few of our clients have already received exam notifications, including some that have not been examined for many years. If January is any indication of what’s to come, one answer is clearly more exams. As always, we’re here to help you simplify and automate your compliance program, just visit our website or click below to get started.