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SEC 2016 Exam Priorities

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January 11, 2016

Dear Friends,

The SEC announced its examination priorities for 2016, as outlined below.

  • Private Fund Advisers: The SEC’s examination of private fund advisers will focus on fees and expenses evaluating, among other things, the controls and disclosures associated with side-by-side management of performance-based and purely asset-based fee accounts.
  • Never-Before-Examined Investment Advisers and Investment Companies: The SEC will continue to conduct focused, risk-based examinations of select registered investment advisers and investment complexes that have not yet been examined.
  • Cybersecurity: The SEC will advance its efforts specific to cybersecurity, including the testing and assessment of investment advisers’ and broker-dealers’ implementation of compliance procedures and controls.
  • Private Placements: The SEC will continue to review private placements, including offerings involving Regulation D of the Securities Act of 1933 or the Immigrant Investor Program, to evaluate whether legal requirements are being met in the areas of due diligence, disclosure and suitability.
  • Fee Selection and Reverse Churning: The SEC will continue to examine investment advisers and dually-registered investment adviser/broker-dealers that offer retail investors a variety of fee arrangements- asset-based fees, hourly fees, wrap fees and commissions.
  • Use of Data Analytics: The SEC will use data analytics to identify signals of potential illegal activity, including but not limited to the following areas: anti-money laundering; microcap fraud; recidivist representatives and their employers; excessive trading; and product promotion.

Please click here for a comprehensive outline of the SEC’s exam priorities for 2016. Feel free to contact us with any questions at (212) 867-0200 or email us at info@counselworksllc.com.

Thank you,



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CounselWorks is a strategic business and regulatory consulting firm, that provides project-based consulting and manages compliance and regulatory programs for hedge funds, private equity firms, investment companies, broker-dealers and investment banks.
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