Skip to content

What broker dealers should expect from the SEC on compliance

ComplianceSEC highlights compliance on the forefront of its four-year strategic plan and announces its new exam initiative

In the last month, the U.S. Securities and Exchange Commission (SEC) has issued two documents that stress the importance of compliance in regulated markets: its Strategic Plan for Fiscal Years 2014-2018 and its new initiative to contact registered investment advisers (RIAs) that have never been examined by the commission.

Strategic Plan

The SEC’s draft of its four-year strategic plan gives prominence to a strong “culture of compliance” in the securities markets. It lists more than 70 initiatives it intends to improve upon and stresses the SEC’s intention to look into current regulatory initiatives and guidance governing registered investment companies. The SEC will also provide continued enhancement of its oversight of broker-dealers to ensure the public is being adequately protected.
One of the key initiatives of the plan is “Enhancing technological resilience of security firms and foster compliance with federal security laws.” With this, the SEC looks to help safeguard the technological systems used by securities markets, firms and other key market participants against failures and security breaches.
The draft can be seen in its entirety here. Comments are being accepted through March 10, 2014 and should be sent by email to

Never-Before Examined Initiative

In a letter dated February 20, 2014, the SEC contacted RIAs that have never been examined, with a specific focus on advisors who have been registered for three or more years . Known as the Never-Before Examined Initiative, it puts these RIAs on notice that they should be prepared for a risk-focused exam sometime in 2014.
RIAs are required to adopt and implement written compliance policies and procedures that are reasonably designed to prevent violations of the Advisers Act. This exam  will look into advisors’ overall business activity, including their books, records and offline/online marketing materials, with specific attention placed on the effectiveness of their compliance program. Governance and supervision of technology used for compliance will also be examined.

Manage Social Media Compliance with Hearsay Social

Hearsay Social enables financial services firms to grow their business on social, while meeting the compliance requirements of the most regulated industries. Our Compliance Solution helps legal and compliance teams meet social media regulatory requirements around approved content, supervision, and recordkeeping. Contact us today to see how we can help your social media initiatives.
Disclaimer: The material available in this article is for informational purposes only and not for the purpose of providing legal advice. We make no guarantees on the accuracy of information provided herein.

Yasmin Zarabi

Yasmin is responsible for Hearsay's legal affairs including commercial, compliance, regulatory and privacy matters. She is a thought leader in compliance for financial services, has been published in industry press and speaks at events around the world.

Visit the Resource Center

Download White Paper, Infographics, Industry Reports and More…

Visit Resources