SEC Risk Alert Highlighting Common Deficiencies Relating to Fees and Expenses
Last week, the Office of Compliance Inspections and Examinations (“OCIE”) of the U.S. Securities and Exchange Commission (“SEC”) issued a National Exam Program Risk Alert (the “Risk Alert”) highlighting OCIE’s observations of common examination deficiencies relating to advisory fees and expenses charged by registered investment advisers over the past two years. This Risk Alert is the first OCIE has issued following the publication of its “2018 National Exam Program Examination Priorities” on February 7, 2018, in which OCIE indicated that its staff have made a concerted effort to publish Risk Alerts more frequently with the ultimate goal of promoting regulatory compliance. This memorandum is a summary of the Risk Alert and some key takeaways for registered investment advisers that manage private funds.