Division of Investment Management's guidance reminds
firms to comply with conditions and representations in exemptive
orders and notes that consequences for noncompliance may be
"severe."
In early May 2013, the Division of Investment Management of the
Securities and Exchange Commission (SEC) released guidance
reminding firms of their obligation to comply with applicable SEC
exemptive orders. The guidance suggests that firms adopt and
implement policies and procedures reasonably designed to ensure
ongoing compliance with each representation and condition in any
such order.1
The SEC staff's guidance follows both a June 2011 report
from the SEC's Office of Inspector General (OIG),2
which noted repeated instances of noncompliance with exemptive
order requirements, and the publication of the Office of Compliance
Inspections and Examinations' (OCIE's) 2013 examination
priorities, which noted compliance with exemptive orders as an
examination priority.3 Given the SEC
