SEC Commissioner Elisse Walter spoke at the 2013 NASAA Public Policy Conference in Washington, D.C. on SEC exams of investment advisers. She spoke about lessons that the SEC has learned through its advisory examination program and the challenges that remain.
Commissioner Walter discussed “presence exams,” which allow the SEC to engage, assess risk and establish a presence with a significant percentage of new hedge fund advisers. These exams usually consist of a thorough and rigorous review of one or two areas of an adviser’s operation. The SEC has begun to enhance the risk-based targeting of adviser examinations. In addition, she spoke about the qualitative assessments the SEC has done, including the use of algorithms to analyze available quantitative data to help the SEC better identify advisers that pose the greatest risk to investors.
Click here to access the speech.