SEC and FINRA to Focus on Retirement Accounts

The U.S. Securities and Exchange Commission (SEC) on June 22^nd announced a multi-year Retirement-Targeted Industry Reviews and Examinations Initiative (ReTIRE Initiative) from their Office of Compliance Inspections and Examinations (OCIE). OCIE will conduct examinations of registered investment advisers and broker-dealers that “will focus on certain higher-risk areas of registrants’ sales, investment and oversight processes, with particular emphasis on select areas where retail investors saving for retirement may be harmed.” OCI will look at compliance programs to determine whether marketing disclosures are made, and whether they address risks with conflicts of interest and supervision and compliance controls. They will also look at which firms make recommendations to retirement clients. The 2015 Examination Priorities will include “examining matters of importance to retail investors and investors saving for retirement.” Along with this initiative, the SEC will work with OCIE to investigate and prosecute violations relating to disclosure, compliance and supervisory procedures. “Risk-based examinations” will focus on the following areas: reasonable basis for recommendations, conflicts of interest, supervision and compliance controls, marketing and disclosure.