March 13, 2024
What happened?
This year, Securities and Exchange Commission (SEC) Exams will remain focused on the new Marketing Rule, as well as AI, according to Natasha Vij Greiner, deputy director of the SEC’s Division of Examinations, who recently spoke at the Investment Advisers Association (IAA) Compliance Conference in Washington, D.C.
Advisers began to see SEC EXAM requests regarding Marketing Rule compliance last year, including requests for information regarding items such as advertising records; RFPs, DDQs, and databases; sponsored events and attended events; public audio and video; prospective client/investor presentations; and testimonials and endorsements (click here for more on 2023 EXAM requests).
In her remarks at the IAA conference, Greiner also indicated that the Division hopes to release a new set of observations regarding compliance with the new Marketing Rule, possibly in the form of a risk alert, on everything the Division has learned from examinations.
Regarding AI, Greiner said the Division has already begun reviewing adviser information (such as Form ADV and websites) for information regarding AI.
To view the SEC’s full list of 2024 EXAM priorities, click here or read our Flash Report.
What does this mean for me?
The SEC published a Risk Alert in June 2023 announcing additional areas of the new Marketing Rule that the Division of Examinations would focus on (see our prior coverage here). Firms should already be complying with the new Marketing Rule and be prepared to provide information to the SEC, if requested.
AI will remain a key focus area for the SEC. Firms should review the proposed rules by the SEC regarding predictive data analytics as well as the sample requests (available here) to ensure they can comply with the proposed rules, and provide adequate documentation to the SEC if requested. Firms should also be proactive to ensure they remain up to date with regulatory expectations and best practices.
Fairview provides comprehensive and ongoing compliance services, including comprehensive marketing and advertising review and complete examination support. Contact us if you have any questions or if you would like to speak with one of our regulatory experts.
