February 15, 2018
SEC to Increase Exam Funding for Fiscal Year 2019
WHAT HAPPENED?
On Monday, February 12th, the Securities and Exchange Commission released its budget for the 2019 fiscal year. The SEC proposed a 3.5 percent increase from the 2018 fiscal budget, for a total of $1.658 billion.
The budget includes an increase for its National Examination Program, raising its allocated funding from $345 million to approximately $366 million. The proposed examination budget would also allow the examination program to restore 24 positions lost in a hiring freeze in 2017.
WHAT DOES THIS MEAN FOR ME?
The proposed budget and possible expansion of exam staff indicates a potential for an increase in SEC examinations. For example, SEC Chairman Jay Clayton has already set a goal of increasing the number of exams administered in fiscal year 2018 by 5 percent. Clayton’s goal could potentially be surpassed, considering the number of exams executed during fiscal year 2017 increased by 32 percent, exceeding the SEC’s original goal of 20 percent.
The SEC will continue to use a risk-based approach to exams by analyzing areas that could be of risk to registered advisers and firms. For specific information on the areas and topics the SEC will be focused on this fiscal year, refer to the SEC Office of Compliance Inspections and Examination list of examination priorities. A summarized version of the examination priorities is also available for reference as a Fairview® Flash Report.
Fairview® is committed to ensuring its clients are prepared for SEC examinations and to shepherding its clients through the examination process when the time comes. Please contact Fairview® if you have any questions or concerns regarding SEC examinations and how that might relate to your current compliance program.
Source: http://www.wealthmanagement.com/regulation-compliance/sec-increase-exam-funding-fiscal-year-2019
Source: https://www.sec.gov/ocie/announcement/ocie-announces-2018-examination-priorities
