On September 6, 2023, the U.S. Securities and Exchange
Commission (SEC) Division of Examinations (the Division) released a
risk alert (the Alert) intended to provide SEC-registered
investment advisers (advisers) with a new level of insight and
additional transparency regarding the scope of adviser
examinations, including how the Division assesses risk and selects
which firms to examine, and the methodology for document requests
during an examination.1
SELECTING FIRMS TO EXAMINE
The Division utilizes a dynamic risk-based approach for
selecting advisers to examine and in determining the scope of risk
areas to examine, which adapts to changes in market conditions,
industry practices, and investor preferences. Each year, the
Division publishes its annual priorities,2 providing
advisers with insight regarding those areas that the Division
believes present potential risks to investors and the integrity of
the U.S. capital markets. When selecting advisers to examine,
