The Securities and Exchange Commission’s (SEC) Office of Compliance Inspections and Examinations (OCIE) is paying close attention to the retirement community this year, the agency said in a statement.
The OCIE listed its 2020 examination priorities, which also include the market infrastructure, innovations in financial technology, and information security, in an effort to enhance transparency about which areas in our society “it believes present potential risks to investors and the integrity of the US capital markets.”
Registered investment advisers (RIAs) will be examined thoroughly, especially those that have never been before, whether they be brand new or existed for years without completing a thorough examination. They will include both advisers for private funds as well as retail investors to determine whether there are any conflicts of interest with respect to providing their clients the best service they can.
“This will include assessing, among other things, whether RIAs provide advice in the best interests of their clients and eliminate, or at least expose through full and fair disclosure, all conflicts of interest which might incline an RIA, consciously or unconsciously, to render advice which is not disinterested,” the OCIE said in its report. “That RIAs are acting in a manner consistent with their fiduciary duty and meeting their contractual obligations to their clients is paramount to maintaining investor confidence in the markets and investment professionals. OCIE, therefore, will continue to focus on risks associated with fees and expenses, and undisclosed, or inadequately disclosed, compensation arrangements.”
Advice given to retail investors will be examined, with a particular focus on seniors, including recommendations and advice made by entities and individuals targeting retirement communities.
The SEC will also take a hard look at innovations in financial technology to assess whether new platforms that drive investment decision-making to stay abreast of recent developments, including their intertwining of adherence to fiduciary duties, effectiveness of compliance programs, and marketing practices. Ongoing advanced in financial technology “warrant ongoing attention and review,” the report added.
National securities exchanges, transfer agents, and clearing agencies will also receive priority attention from the SEC to determine their influence on market infrastructure.
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Tags: Advisors, Examinations, fiduciary duty, Financial Technology, OCIE, Retirement, SEC