The staff of the SEC’s Office of Compliance Inspections and Examinations has announced its 2017 examination priorities.
In 2017, the SEC will focus on:
*Retail Investors—Protecting retail investors from product and service risks, roboadvisers and wrap fee programs
*Senior Investors and Retirement Investments—Focusing on variable insurance products, ETFs and target-date funds
*Market-Wide Risks—Focusing on compliance with the SEC’s Regulation SCI and anti-money laundering rules, particularly for money market funds
*FINRA—Enhancing oversight of FINRA by inspecting its operations, regulatory programs and assessing broker-dealer examinations
*Cybersecurity—Overseeing compliance with cybersecurity compliance procedures and controls for advisers and broker-dealers
*Never-Before Examined Advisers—Examining newly registered advisers and advisers that have never been examined
*Share Class Selection—Identifying and assessing conflicts of interest by advisers and brokers in their share class recommendations
*Municipal Advisers—Evaluating compliance with rules issued by SEC and the Municipal Securities Rulemaking Board
*Private Fund Advisers—Assessing conflicts of interest and the adequacy of conflicts disclosures
Many of these areas—wrap programs, ETFs, variable insurance, target date funds and cybersecurity—continue longstanding initiatives. Other priorities—new advisers, never-before examined advisers, roboadvisers, private advisers and FINRA—are more recent SEC priorities.
In past years, the SEC has adhered closely to its stated priorities in its examinations, and we expect that to be the case in 2017. Compliance professionals should tailor their compliance programs and training to the SEC’s priorities and practices.