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The Securities and Change Fee’s Division of Examinations just lately launched its 2024 priorities, figuring out the important thing dangers and matters for the approaching yr. The SEC publishes these priorities to encourage companies to focus compliance efforts on these areas.Â
The beneath just isn’t an exhaustive record of what could be centered on throughout an examination. Entity historical past, operations, providers, merchandise supplied and different threat elements are all inside scope. I sat down with colleague Thomas Kellerman to study extra concerning the SEC’s introduced priorities.Â
RIA Exams
Advisors have to be conscious that funding recommendation concerning complicated, illiquid and unconventional merchandise will probably be scrutinized in addition to recommendation fitted to older buyers saving for retirement.
Additionally, processes for figuring out that funding recommendation is supplied in shoppers’ finest curiosity will probably be reviewed. Examinations will tackle how advisors mitigate conflicts of pursuits and allocate investments to sure accounts, akin to wrap charge, non-taxable and brokerage fee.
Specifically, examination focus will embody advertising and marketing follow assessments for whether or not advisors have: (1) adopted and carried out fairly designed written insurance policies and procedures to stop violations of the Advisers Act and the foundations thereunder together with reforms to the Advertising Rule; (2) appropriately disclosed their marketing-related info on Type ADV; and (3) maintained substantiation of their processes and different required books and data.
Advertising evaluations of disseminated commercials (hypothetical efficiency, third-party scores, testimonials) will proceed to happen.
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