SEC sweep of new registrants to last two years

The Securities and Exchange Commission’s (SEC) presence examination initiative on newly-registered investment advisers is expected to run for approximately two years, according to a statement from the US regulator on its examination priorities for 2013. 

The SEC initiative will consist of four phases: engage with the new registrants; examine a “substantial percentage” of newly-registered advisers; analyze the examination findings; and finally, report to the industry its observations.

The SEC was not immediately available to clarify the timings of these stages or provide further comment. 

In addition to the new registrant initiative, the SEC will also “prioritize examinations of private fund advisers where the staff’s analytics indicate higher risks to investors relative to the rest of the registrant population, or there are indicia of fraud or other serious wrongdoing,” the SEC said. 

Private equity firms managing north of $150 million in assets were required to enter the SEC's remit last March. A percentage of newly-registered firms have already undergone examinations, some of which shared their experiences at the PEI CFOs and COOs forum held earlier this year in New York. 

In an earlier interview with PE Manager, the SEC's Carlo di Florio, head of the agency's Office of Compliance Inspections and Examinations, said firms’ ability to address potential conflicts of interest with investors, portfolio companies and other stakeholders is one of the key focus areas for examiners.