On January 11, the Securities and Exchange Commission released the Office of Compliance Inspections and Examinations’ (OCIE) 2016 examination priorities, which seek to address: (1) the protection of retail investors, particularly those saving for retirement; (2) the monitoring and assessment of market-wide risks; and (3) the use of data to detect potentially illegal activity.
Many examination priorities represent areas of ongoing focus by OCIE, such as fee arrangements, cybersecurity and market manipulation. However, OCIE has added several new priorities pertaining to public pension advisers, liquidity controls, and suitability and disclosure issues pertaining to certain investment products. More specifically, OCIE has indicated that its focus on public pension advisers will center on issues such as pay-to-play and undisclosed gifts and entertainment. OCIE also will seek to examine advisers with exposure to, and broker-dealers that deal in, potentially illiquid fixed income securities. Finally, OCIE will review the suitability of recommendations and disclosures made to investors with regard to exchange-traded funds, variable annuities and “new, complex and high risk” products.