SEC Exam Priorities for 2014

Taking-Notes-in-MeetingRecently, the SEC released its annual Examination Priorities letter, which describes where the agency plans to concentrate its efforts in 2014. Some items that will be of particular interest to independent broker dealers and their registered reps include the SEC taking a close look at:

  • Supervision conducted by large branch offices and independent firms
  • Supervision of financial advisors located in remote locations;
  • The suitability of IRA rollovers;
  • Dual registrants and the potential conflicts of interest that could exist within that business model; and
  • The suitability of variable annuity buybacks. Specifically, instances in which registered representatives recommend that the customer accept the buyback terms and whether those recommendations are suitable as well as what types of disclosure are made to the customer.

This focus, the SEC notes, is intended to reduce investor risk, but it may result in additional compliance regulations down the road, so make sure to keep this on your radar. We will post updates on this as more developments arise.

What do you think of these priorities? Feel free to share your thoughts in the comments section!


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