On January 13, 2015, the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) announced its 2015 examination priorities for investment advisers, broker-dealers and transfer agents.  These priorities emphasize the importance of transparency and seek to identify, through enhancements in technology, potential illegal activity by focusing on the following key areas.

Protecting Retail Investors and Investors Saving for Retirement

OCIE noted that retail investors are more dependent than ever on their own investments for retirement and are increasingly facing new and complex options for investing.  Products and services formerly identified as alternative or institutional like private funds, illiquid investments and structural products are increasingly being developed for retail investors.  As a result, in 2015 OCIE plans several initiatives to assess the risks of these trends to retail investors, which emphasize transparency and suitability concerns.  These include targeting (a) the adequacy of fee arrangements by investment advisers; (b) firms’ sales practices when making investment recommendations; (c) the suitability of recommendations; and (d) the supervision of registered representatives and financial advisors in branch offices.