SEC EXAMS Division Issues Reg. S-ID Risk Alert

The SEC Division of Examinations recently published a risk alert summarizing observations from exams of registered investment advisers and broker-dealers related to compliance with Reg. S-ID, which is generally designed to protect and prevent retail customers from identity theft and financial loss. Reg. S-ID requires certain registered investment advisers and broker-dealers (as well as certain investments) to establish and implement a written program designed to detect, prevent, and mitigate identity theft for covered accounts offered and maintained primarily for personal, family, or household purposes that involve, or are designed to permit, multiple payments or transactions. Covered accounts also include any other accounts that pose a reasonably foreseeable risk to customers of identity theft.