The Securities and Exchange Commission will begin random annual visits to investment advisors, instead of its usual five-year visits, a ccording to published reports.
John Walsh, chief counsel for the SEC's Office of Compliance Inspections and Examinations, has reportedly said the new policy will allow the SEC to more actively monitor lower-risk advisory firms. The SEC divides investment-advisory firms into "high" and "low" risk categories, based on factors that include how a firm performed on previous examinations. Firms deemed higher risk would be subject to more frequent and targeted examinations.The program would require less manpower, a key detail as the SEC begins to register hedge funds. However, a recent report from the Government Accountability Office said under the new method, it is possible that as many as one-third of firms wouldn't be selected for examination within the next decade. The GAO said that said it wasn't clear if the revamped approach would be more of an abuse deterrent than the existing system.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access