Third-Party Exams: SEC Apparently Drops the Initiative

It appears that the SEC will not pursue a third-party compliance examination requirement for investment advisers in the foreseeable future.  In 2016, the SEC staff had recommended that the Commission consider requiring third party examinations of investment advisers as a way to increase the number of advisers examined each year.  Many industry groups had opposed the third party exams for their likely impact on small advisers and uncertainty about quality and cost.  Some also believed a third-party examination rule would give FINRA an opening to push itself as a self-regulatory organization for investment advisers.  Third-party examinations were omitted from the SEC’s most recent regulatory agenda which precludes any realistic chance of a third-party audit rule in the foreseeable future.

As always, members of MarketCounsel’s compliance management programs can find more information on examinations on RIAglass.

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