\t\t\t\tThe Securities and Exchange Commission has unveiled its Never-Before-Examined Initiative, which will allow it to look at registered investment advisers that have yet to be examined. The SEC shared details of its plan in a letter to these unexamined advisers, of which there are about 4,000. Some of these firms have been registered with the regulator for more than three years. <\/p>\n
The SEC says it intends to inspect a significant number of the advisers who haven’t been examined yet but that the agency will place its emphasis on those who have been registered for at least three years. Its initiative will employ two approaches-focused reviews and risk assessment. The former will look at RIAs’ compliance programs, disclosures, filings, portfolio management, marketing, and client asset safekeeping: <\/p>\n
Compliance Programs:<\/em><\/strong> Examiners will look at the effectiveness of an RIA’s compliance program. They will also review records and advisory books to figure out if an adviser has properly identified interest conflicts and risks, put into place the appropriate measures and procedures and policies to manage and mitigate both, and hire a competent Chief Compliance Officer. <\/p>\n