In a recent interview with Drew Bowden, the Director of the Securities and Exchange Commission’s (SEC’s) Office of Compliance Inspections and Examinations (OCIE), he spoke to the mission, role and complications associated with operating the examination branch of the SEC – and more specifically, outlooks for the future of OCIE.
Bowden first discussed the varied reasons why OCIE may conduct an examination on a firm. While “the majority of examinations that we do are based upon our own risk analysis [measures]”, particularly within the operations of OCIE’s Risk Analysis and Surveillance group, other circumstances – from violations that are reported by “tips, complaints, referrals and whistleblowers” and other internal personnel, to new business models or hybrid firms operations that the SEC is curious in learning more about – may also prompt an examination.
He also addressed such questions as how Chief Compliance Officers can best handle an SEC examination: “be organized, be responsive, and be helpful” to examination staff, and educate the examiner on the nature of the firm and its operations from the start. On the subject of outside compliance consultants, Bowden suggests firms be open and patient to third-party reviews, and in matters of examination preparation, he warns against “coaching” of staff prior to an examination that may lead to falsified information being perpetuated. Finally, Bowden confirmed OCIE’s internal review of its Exam Manual, which is still pending and awaiting public release.
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 Source: IA Watch YouTube Video, Feb.10,2014