The SEC Discloses Specifics of New Advisor Exams

Posted on February 27th, 2014 at 9:15 AM

From the Desk of Jim Eccleston at Eccleston Law Offices:

The "Never-Before Examined Initiative" is aimed at targeting unexamined advisors that have been registered with the SEC for three or more years.

Two approaches include risk-assessment and focused reviews. The risk-assessment approach includes a high-level examination of an advisor’s overall business activities with a particular focus on its compliance program. The focused review will look at higher-risk areas of the advisor’s business operations including filings and disclosure, marketing, portfolio management as well as safekeeping of client assets. 

Specifically, the SEC details the following:

Compliance Program. Registered investment advisers are required to adopt and implement written policies and procedures that are reasonably designed to prevent violations of the Advisers Act.

Filings/Disclosure. Investment advisers must disclose all material facts regarding conflicts or potential conflicts of interest so that clients can make an informed decision regarding entering into or continuing an advisory relationship.

Marketing. Investment advisers must utilize fair and balanced marketing materials to solicit new clients or retain existing clients. 

The attorneys of Eccleston Law Offices represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 50 years in delivering the highest quality legal services.

Related Attorneys: James J. Eccleston


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