SEC Reviewing Multi-Branch Adviser Compliance

SEC Reviewing Multi-Branch Adviser Compliance

from Cipperman Compliance Services

The staff of the SEC’s Office of Compliance Inspections and Examinations issued a Risk Alert announcing its “Multi-Branch Adviser Initiative.” The Alert expresses concern about the “unique risks and challenges” for advisers operating through branch offices geographically separate from the principal place of business. The Initiative will focus on compliance program elements including the supervision structure, the role and empowerment of compliance personnel, and implementation of policies and procedures. The staff will also review investment recommendation oversight, conflicts of interest, and allocation of investment opportunities. The OCIE staff will assess how multi-branch firms exercise oversight and supervision of branch office activities.

OUR TAKE: The SEC is catching up with FINRA, which has longstanding prescribed oversight obligations for OSJs and branches. For compliance officers, oversight of far-flung operations creates additional information and supervision challenges that often exceed current resources.

https://www.sec.gov/ocie/announcement/risk-alert-multi-branch-adviser-initiative.pdf

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