OCIE, through the National Examination Program (NEP), will conduct examinations of SEC-registered investment advisers and broker-dealers (collectively, “registrants”) under the Retirement-Targeted Industry Reviews and Examinations (“ReTIRE”) Initiative that will focus on certain higher-risk areas of registrants’ sales, investment, and oversight processes, with particular emphasis on select areas where retail investors saving for retirement may be harmed.
As outlined in OCIE’s 2015 Examination Priorities, there will be a focus on “examining matters of importance to retail investors and investors saving for retirement.” Under this initiative, OCIE will be focusing on retirement-based savings in recognition of the complex and evolving set of factors that retail investors face when making such investment decisions, and will include a focus on the registrants’ sales, investment, and oversight processes, with particular emphasis on select areas where retail investors saving for retirement may be harmed.
The risk alert goes on to say how the staff intends to use data analytics, information from prior examinations, and examiner-driven due diligence to identify registrants to examine under this initiative. As part of the examinations or the selection of examination candidates, the staff may focus on the activities of investment advisory representatives and/or broker-dealer registered representatives (collectively, “representatives”).
The risk-based examinations conducted under the ReTIRE Initiative will focus on the services offered by the registrants to investors with retirement accounts in the following areas:
- Reasonable Basis for Recommendations
- Conflicts of Interest
- Supervision and Compliance Controls
- Marketing and Disclosure
While these are the primary focus areas for the ReTIRE Initiative, examiners may select additional topics based on operational and other risks identified during the examinations.
Read the full Risk Alert