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SEC Examinations

SEC Examinations. John Walsh April 18, 2007. Standard Disclaimer.

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SEC Examinations

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  1. SEC Examinations John Walsh April 18, 2007

  2. Standard Disclaimer • The Securities and Exchange Commission disclaims responsibility for any private publication or statement of any SEC Commissioner or employee. This outline expresses the author’s views and does not necessarily reflect those of the Commission, the Commissioners, or other members of the staff.

  3. Agenda • Briefing on the SEC Exam Program • Exam Program FAQs • Top Ten Exam Hot Topics

  4. A. The SEC Exam Program • Regular Exams • Regular oversight of critical firms & functions • Examples: • Large brokers’ internal controls • Higher risk advisers • Cause Exams & Sweeps • Fast & flexible response to emerging risks • Examples: • Revenue sharing by funds and brokers • Statistical Exams • Random sample of low risk advisers • Goals: • Test risk system • Learn the unexpected • Show the flag • Cost effective oversight

  5. Number of Examinations in 2006 • Self-Regulatory Organizations: 43 • Broker-Dealers: 741 • Investment Advisers: 1,346 • Investment Company Complexes: 308 • Others:* 184 TOTAL = 2,622 * PCAOB, 175 Transfer Agents, 8 Clearing Corp’s

  6. Part of a Comprehensive Program

  7. Do examiners visit branch offices? Will the examination be a surprise? Will examiners ask for e-mails? How much time will the exam team allow you to produce records? Can you claim the attorney-client privilege? Will you get an exit conference? How long will it take to finish the exam? How many exams are referred to enforcement? Should you fully implement your representations? What do you do if you have a question or concern about an exam? B. Exam Program FAQs

  8. Municipal Securities Insider Trading Anti-Money Laundering Sales to the Military Identity Theft Dual Registrants Seniors Variable Insurance Products Proxies Stock Loans C. Top Ten Exam Hot Topics

  9. Questions? Thank you.

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