A Checklist for Advisers to Prepare Their Traders for SEC Exam Interviews

When examiners from the SEC’s Office of Compliance Inspections and Examinations (OCIE) conduct on-site exams of registered investment advisers, they typically ask to interview various employees. For example, examiners may want to interview traders to better understand how client trades are placed. Thus, it is important that advisers prepare their traders for those interviews. This article discusses why OCIE examiners may want to interview investment advisers’ traders; explains why advisers need to prepare traders to answer examiner questions; and provides a checklist of questions developed by a former SEC examiner for advisers to use to prepare traders for exam interviews, as well as review their overall trade procedures to ensure compliance with SEC rules and their own compliance programs. See our two-part series “HFLR Program Explores Current SEC Examination Practices and Issues”: Part One (Dec. 20, 2018); and Part Two (Jan. 10, 2019).

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