OCIE Unveils National Exam Analytics Tool

March 3, 2014

OCIE, the inspection arm of the SEC, recently unveiled its National Exam Analytics Tool or "NEAT."  NEAT was developed by its Quantitative Analytics Unit, which is part of OCIE’s National Exam Program.  With NEAT, OCIE examiners are able to access and systematically analyze massive amounts of trading data from firms in a fraction of the time it has taken in years past. In one recent exam, an exam team used NEAT to analyze in 36 hours literally 17 million transactions executed by one investment adviser.

The tool can accept large amounts of a firm's trading data, e.g., three years worth, and automatically generate reports. Among its many uses, NEAT can search for evidence of potential insider trading by comparing a database of significant corporate activity like mergers against the companies in which a registrant is trading and analyze how the registrant traded at the time of those significant events. NEAT can review all the securities the registrant traded and quickly identify the trading patterns of the registrant for suspicious activity.

In 2014, OCIE examiners will be using the NEAT analytics to identify signs of not only possible insider trading, but also front running, window dressing, improper allocations of investment opportunities, and other kinds of misconduct.

Click here for an SEC speech discussing NEAT.