Securities Litigation

OCIE released its 2017 exam priorities on January 12. The priorities list was most notable for being shorter than prior years. But that likely means only more focus, rather than less vigor. Here is the list with some quick takes on its content:

Retail Investors:

Robo-adviser and wrap-fee programs (under scrutiny too for the DOL fiduciary rule - whether it stays or goes)

ETFs (due to increasing popularity)

Un-examined IA's (recognizing resource scarcity and the growth of SEC-registered IAs)

Recidivist Reps (the subject of several Wall St. Journal articles last year)

Multi-branch advisers (branch offices faced long scrutiny for BDs, so now for IA's too)

Share-class selection & suitability (continuing from past years)

Seniors

Pension advisers' conflicts and pay-to-play (December's NY indictments)

Seniors - especially VA's and target date funds (a constant, reflecting aging demographics)

Market Risk

Reg. SCI (systems compliance)

AML (a perennial favorite)

Money-market compliance (the Rules just became effective Oct. 2016)

Exchanges

Clearing Agencies

FINRA The SEC typically doesn't tout this as a priority, but it may simply reflect the Commission having to rely more on FINRA's BD examinations, while OCIE focuses on IAs.

Cybersecurity (another constant and moving target)

Municipal Advisers (the SEC continues expanding its attention to the municipal securities markets)

Private Fund Advisers (another "emerging growth area" for SEC activism)

The OCIE document is here.

Thomas K. Potter, III (tpotter@burr.com) is a partner in the Securities Litigation Practice Group at Burr & Forman, LLP. Tom is licensed in Tennessee, Texas and Louisiana. He has over 30 years' experience representing financial institutions in litigation, regulatory and compliance matters. See attorney profile.

© 2017 by Thomas K. Potter, III (all rights reserved).