Tis the season for the regulators to announce their examination
priorities. No less than the SEC's Office of
Compliance Inspections and Examinations released its 2014
Examination Priorities for its National Examination Program
("NEP").
In particular, the SEC identified several new issues for
registered investment advisers, primarily for those RIAs, who are
at least three years old and have never been examined; as well
as continued presence exams for hedge and private equity managers;
wrap fee programs; quantitative trading models; and disguised
distribution payments. OCIE will also continue to examine for
failure to comply with the custody rule; conflicts of
interest, including, but not limited to, undisclosed
compensation and allocation of investment opportunities, and
performance marketing; alternative investment strategies
for registered funds; money market fund stress
testing; securities lending; senior management meetings
concerning risk management; IT
