SEC Risk Alert Highlights COVID-19 Compliance Risks and Considerations for Investment Advisers and Broker-Dealers
The Office of Compliance Inspections and Examinations (“OCIE”) of the U.S. Securities and Exchange Commission (“SEC”) recently published a Risk Alert (the “Risk Alert”)1 highlighting certain COVID-19-related issues, risks, and practices relevant to SEC-registered investment advisers and broker-dealers (collectively, “Firms”). The Risk Alert, which is the result of ongoing outreach with Firms undertaken by OCIE in its effort to assess the impact of COVID-19, provides OCIE’s summaries and observations in the following areas: (i) protection of investors’ assets; (ii) supervision of personnel; (iii) practices relating to fees, expenses, and financial transactions; (iv) investment fraud; (v) business continuity; and (vi) protection of investor and other sensitive information. Below is a summary of the observations and recommendations identified in the Risk Alert and some key takeaways for Firms