SEC Risk Alert Reiterates Focus On Recordkeeping

The U.S. Securities and Exchange Commission's Risk Alert provides additional information regarding the Division of Examination's risk-based approach for both selecting registered investment advisers to examine and in determining the scope of risk areas to examine. It sets out the documents and information that staff will initially request as well as additional requests for information and documents from the adviser the staff may request as the examination progresses. Firms need to be aware that electronic communications–with all of the modalities such as emojis, GIFs, additions and deletions–are specifically included in the regulator's risk-based approach.

Risk-based approach

Some of the reasons the Division may select an adviser to examine include, but are not limited to, one or more of the following: