SEC Requesting that Firms Submit Data via Formatted Template as Part of Investment Adviser Exams — What Your Firm Needs to Know

March 21, 2018 by Michael Lehman

SEC Requesting that Firms Submit Data via Formatted Template as Part of Investment Adviser Exams — What Your Firm Needs to Know

Since the U.S. Securities and Exchange Commission’s (“SEC”) 2014 implementation of its National Exam Analytics Tool (“NEAT”), the SEC has increased the type and amount of data it requires from registered investment advisers as part of the SEC’s exam program. Specifically, ACA has observed a substantial increase in the type of trading and position data that the SEC uses to analyze advisers’ investing activities.

The SEC’s request list has expanded beyond trading activity to include forensic testing reports as well as all compliance calendars tracking communications with publicly traded issuers. Most recently, ACA has observed that the SEC is requiring firms to submit requested data — including employee trading data — via a standardized template.

ACA Guidance

We recommend that investment adviser firms take the following actions to help prepare for a similar regulator request or potential regulatory exam:

  • Confirm that you have equivalent access to trading data, in particular that your IT department can accommodate a regulator request in a reasonable amount of time; 
  • Confirm that your firm's surveilled trading data is complete and not only a sample; and
  • Review your policies and procedures regarding forensic testing following all expert or issuer meetings held by associated persons.

How ACA Can Help

ACA's Decryptex® provides in-depth trade surveillance to help identify items of interest and non-compliant trading and investment activity. The solution includes a case management tool that can track and store emails, reports, and research related to each investigation.

Resources

ACA Technology can provide the following resources upon request:

  • Sample reports that illustrate items of interest in the areas of MNPI and Fairness in Dealing;
  • A copy of the most up-to-date SEC request list; and
  • The Decryptex algorithms library.

Insurance Discount or Rebate - You May Be Eligible

ACA has been working to build relationships with certain insurance carriers and brokers that offer coverage to our clients. Part of our efforts include negotiating discounts or premium reimbursements for firms that obtain one or more of our eligible products, including Decryptex. More information

For More Information

For more information about Decryptex and to request the resources listed above, contact Michael Lehman.

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