The Office of Compliance Inspections and Examinations’ (“OCIE”) released a National Exam Program Risk Alert related to examinations and supervision practices at Registered Investment Advisers.
OCIE’s 2016 Examination Priorities include examining compliance oversight and controls of registered investment advisers that have employed or employ individuals with a history of disciplinary events, including individuals that have been disciplined or barred from a broker-dealer. Such individuals may present an increased risk of future misconduct, and thus can present harm to clients. OCIE is undertaking an initiative to examine the supervision practices and compliance programs of registered investment advisers that employ individuals with a history of disciplinary events in the financial services sector (the “Supervision Initiative”). These examinations will assess such advisers’ business and compliance practices, particularly those practices related to the firms’ supervision of higher-risk individuals. OCIE is issuing this Risk Alert to provide additional information concerning the Supervision Initiative.