February 22, 2013
SEC 2013 Examination Priorities
On February 21, 2013 the SEC released its 2013 examination priorities. The SEC states that with respect to broker-dealers it is going to continue to focus on sales practice/fraud, trading, capital, and AML. New issues of concern for the examination process are: the market access rule,…
January 28, 2013
2013 FINRA Exam Priorities
On January 11, 2013, FINRA released its 2013 examination priorities letter. Not surprisingly, FINRA will continue to prioritize core regulatory areas such as AML compliance and insider trading. FINRA will also continue to focus on suitability and complex products, highlighting in the letter FINRA’s recently revised suitability rule, and adding business development companies (“BDCs”) and closed-end funds to its list of complex products. FINRA warns that BDCs expose investors to significant market, credit and liquidity risks and the newer “non-traded BDC funds” can limit investors’ exit opportunities to “periodic share repurchases by the BDC at high discounts.” FINRA also warns that some closed-end funds are returning capital to maintain high distribution rates, causing the fund to trade at high premiums compared to the fund’s NAV.