On July 19th, the SEC announced the establishment of supervisory cooperation arrangements (memoranda of understanding) with European regulators related to the asset management industry. While the SEC initiative deals only with European regulators, it may signal increased interest by the SEC in its asset management registrants outside the United States especially given that some are new to their jurisdiction post Dodd-Frank.
Of note in the press release is this sentence: “These MOUs also facilitate the ability of the SEC and its counterparts to conduct on-site examinations of registered entities located outside the United States.” In our experience, when conducting examinations of registrants outside the United States, the SEC staff have often (but not always) been accompanied and/or have liaised with staff of the regulator in the registrant’s domicile and would likely continue to cooperate with regulators other than EU regulators when they conduct examinations of overseas registered investment advisers.
Smarter risk based exams domestically and efforts to share information and avoid duplicated efforts internationally support the SEC’s movement to improve regulation.
The SEC release can be found below.
http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370539728294
