2016 SEC & FINRA Exam Priorities

If you ever want to know what the regulators are focusing on when they conduct examinations, they actually tell you. Last month FINRA and the SEC put out their examination priorities. These priorities can be used to help you understand their focus and give you guidance on how to prioritize your efforts to maintain a compliant firm.

In the coming weeks, Oyster will be providing commentary on some of the hot button issues on the list. We have provided an easy reference is below:

TopicSEC PriorityFINRA
Priority
Protecting Retail Investors
Senior InvestorsxAlso includes Vulnerable Adult Protection
ETFs (creation & Redemption process)xx
Private Placement Disclosure & Suitabilityxx
Transfer Agentsxx
Branch Office Supervisionx
Fee Selection & Reverse Churningx
Variable Annuitiesx
Public Pension Advisors  (pay-to-play)x
Product Promotionx
Compliance for Newly-Registered Municipal Advisorsx
Previously un-examined Investment Advisorsx
Recidivist Reps & their Employersx
Private Fund Advisorsx
Sales Charge Discounts & Waiversx
529 College Savings Plansx
Outside Business Activity Review Proceduresx
Incentive Structures for Registered Repsx
Market Integrity
Liquidityxx
Excessive Tradingxx
Microcap Fraudxx
Clearing Agenciesx
Cross-Market & Cross-Product Manipulationx
Vendor Display Rulex
Fixed-Income (order handling, mark-ups & controls)x
Reg SHOx
Audit Trail Integrityx
Technology
Cybersecurityxx
Technology Management (Reg SCI)xx
Financial & Operational Controls
AML  (SARs Reporting)xx
Data Quality & Governancex
Internal Auditx
Information Leakage (surrounding trading activities)x
Position Valuation by Proprietary Tradersx
Client Onboardingx
Transmittal of Customer Fundsx
Investment Banking & Research Business Lines
(conflicts of interest, undue influence)
x
OutsourcingDue Diligence & Risk Assessment of outsource providers and supervision of outsource services
Market-Maker & Net Capital Exemptionsx
Fixed-Income Brokeragex

 

In the interim, if you have any questions or concerns about any of these topics, please contact us and we will follow-up promptly. Our consultants are experts in these areas and have the experience and perspective gained from working with hundreds of clients to help you efficiently and effectively run your firm.

For more information, please call Oyster Consulting at (804) 965-5400, and one of our associates will be happy to assist you.

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