The SEC Is Calling: What CCOs Should Expect During Initial Communications With OCIE Examiners (Part One of Two)

SEC examiners begin many routine examinations of private fund managers with lengthy calls with the adviser’s chief compliance officer (CCO). In part designed to help the SEC obtain the greatest return on the investment of its limited resources, these calls provide SEC examiners with an opportunity to learn more about the relevant adviser’s business and compliance program earlier in the exam process. This two-part series examines the format and substance of these initial calls and provides guidance on how CCOs can prepare for these interactions with the examiners. This first article discusses the ways in which the SEC initiates the examination process and provides insight into the form and substance of these introductory calls between the examiners and the CCO, including who participates in them on behalf of each of the SEC and the adviser. The second article will examine how the SEC is using these calls to meet multiple objectives; outline the topics that are generally discussed during them; and explore how a CCO can prepare accordingly, including what documents and information he or she should review in advance and what materials should be on hand during these calls. See “Effects of Expanding SEC Investment Adviser Examinations” (Mar. 24, 2016); and our three-part series “What Do Hedge Fund Managers Need to Know to Prepare for, Handle and Survive SEC Examinations?”: Part One (Feb. 3, 2011); Part Two (Feb. 10, 2011); and Part Three (Feb. 18, 2011).

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