The SEC is early to the game releasing the 2024 Exam Priorities just eight months after the 2023 Exam Priorities. Aside from the fact that the regulator seems to be adding some pep to its step, the structure has reverted back to including exam focus areas by type of registrant. We don’t see a notable and significant changes section at the outset like we did last year.
Here are a few takeaways we want to share:
- While the compliance date is still well ahead of us for the new private fund rule, we see that the priorities indicate that the LPAC role and contracts will be a focus now. This falls hand in hand with the adviser’s current and ongoing fiduciary duty.
- Advisers can review the priorities to see if their activities may make them a SEC target this year.
- For example, does your firm show low performance vs peers? Having high performance versus your peers has always had the potential to make you a target, but having lower performance does too.
- Is your firm engaging in certain types of marketing activities, etc. (ie. Are you using testimonials?) You may be more likely to be an exam target.
- Lastly, realize that this is just a starting point. You should dig into the recent risk alerts too and compare the details related to your business activities to see what is relevant. Don’t think that areas not discussed in great detail, (ie. ESG) won’t still be on your exam team’s radar.
For more information, please contact us at info@sec3compliance.com, at (212) 706-4029 x 229, through LinkedIn or visit us on our website at www.sec3compliance.com.
