Advisers need not wait for a warning call from OCIE to prepare their firms for an examination — regulators have already offered a hint about their enforcement priorities.
In what some might call an early heads up, the SEC and FINRA in January issued annual guidance to the firms they regulate, according to a blog by Todd Cipperman of Wayne, Pennsylvania-based Cipperman Compliance Services.
“If past is prelude, the regulators will fulfill their promises to examine the highlighted areas,” Cipperman writes. Among top priorities, the regulatory agencies recommended that compliance teams “spruce up procedures and testing” around cybersecurity, robo advice and elder abuse
The SEC’s Office of Compliance Inspections and Examinations oversees 12,000 RIAs and 4,000 broker-dealers, according to the agency. FINRA supervises more than 634,800 brokers and 3,800 securities firms, levying a record-breaking $176 million
in fines last year.
Both OCIE and FINRA said they welcome feedback about their priorities, with FINRA CEO Robert Cook specifically mentioning a “listening tour” of member firms.
“Some have asked me when my listening tour will be finished,” he wrote. “The short answer is: never.”
For Cipperman’s top 10 significant priorities in exams this year, click through our slideshow. To view his commentary on the 10 most significant changes to Form ADV, click here