SEC Will Recommend 3rd Party Compliance Reviews for RIAs

From Cipperman Compliance Services, LLC

The SEC’s Director of the Division of Investment Management, David Grim, testified that the Division is developing a recommendation that “would establish a program of third-party compliance reviews” for registered investment advisers.  Mr. Grim said that the Division is working with the SEC’s Office of Compliance Inspections and Examinations to develop the recommendation.  He said that the reviews “would supplement” OCIE exams “in order to improve compliance.”

OUR TAKE: The SEC is moving toward requiring third party compliance exams in an effort to quell criticism that it examines less than 10% of advisers per year.  This concept has gained significant momentum with support from Congress (See, an SEC commissioner (, and the SEC Chairman, who had asked the staff to review the concept.

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