The Securities and Alternate Fee’s Division of Examinations lately launched its 2024 priorities, figuring out the important thing dangers and matters for the approaching yr. The SEC publishes these priorities to encourage corporations to focus compliance efforts on these areas.
The beneath just isn’t an exhaustive checklist of what is likely to be targeted on throughout an examination. Entity historical past, operations, companies, merchandise supplied and different danger components are all inside scope. I sat down with colleague Thomas Kellerman to be taught extra in regards to the SEC’s introduced priorities.
RIA Exams
Advisors should be conscious that funding recommendation relating to advanced, illiquid and unconventional merchandise shall be scrutinized in addition to recommendation fitted to older traders saving for retirement.
Additionally, processes for figuring out that funding recommendation is offered in shoppers’ greatest curiosity shall be reviewed. Examinations will tackle how advisors mitigate conflicts of pursuits and allocate investments to sure accounts, similar to wrap charge, non-taxable and brokerage fee.
Particularly, examination focus will embody advertising and marketing observe assessments for whether or not advisors have: (1) adopted and applied fairly designed written insurance policies and procedures to forestall violations of the Advisers Act and the foundations thereunder together with reforms to the Advertising and marketing Rule; (2) appropriately disclosed their marketing-related info on Kind ADV; and (3) maintained substantiation of their processes and different required books and data.
Advertising and marketing opinions of disseminated ads (hypothetical efficiency, third-party rankings, testimonials) will proceed to happen.