Two examination precedence areas for the Securities and Alternate Fee this yr are the company’s new Advertising Rule in addition to advisors’ use of synthetic intelligence, in line with Natasha Vij Greiner, deputy director of the SEC’s Division of Examinations.
“You’re going to see us specializing in advertising in nearly each examination,” Greiner stated Thursday on the Funding Adviser Affiliation’s annual compliance convention, held in Washington. “How do you take a look at a agency with out taking a look at their advertising supplies?”
Greiner — who was just lately named the brand new director of the Division of Funding Administration, beginning Friday — said that the company additionally continues to do centered exams relating to the brand new Advertising Rule.
Greiner additionally signaled that the company hopes to share some observations — presumably in a threat alert — about what exams have revealed within the final yr when it comes to ”what’s going effectively and what’s not” with advertising rule compliance.
Some companies nonetheless “do not know that this rule even got here out,” Greiner stated.
The company warned final June in its second Threat Alert associated to Advertising Rule compliance that it was beefing up exams of advisors’ compliance with the rule by zeroing in on testimonials and endorsements, third-party rankings and Type ADV.
The primary Advertising Rule Threat Alert, launched Sept. 19, 2022, warned of different areas that SEC examiners would begin specializing in in exams.
Exams on AI
As to AI, the examination division “is de facto centered on advisors, and all registrants’ use of AI,” Greiner relayed. “By way of exams, we’re taking note of disclosures.”