Tips to Prevent an SEC OCIE Investment Adviser Exam from Going Bad

Strategies to employ when an SEC OCIE adviser exam goes bad drew a great crowd at the recent CSS Ascendant Fall Compliance Conference. Proactively pointing an exam in the right direction was a consistent theme, summarized by the familiar refrain: “There is no substitute for preparation.”

A few keys to note if you find your firm in this situation:

  • Understand the SEC’s time frame as well as its scope – What kind of exam is it?
  • Call in your helpers. This is a time when you should have compliance counsel and legal counsel as a partner.
  • Keep the right attitude in the process – Be polite, responsive and timely.
  • Keep track of all your conversations

The importance of understanding the type of exam, time frame expectations and scope gets your arms around the exam expectations and keeps you organized. It is absolutely acceptable to ask for clarification, but as panelist Stephanie Monaco, a Partner at Mayer Brown, LLC in Washington DC, pointed out, it’s crucial to be responsive to document requests.

Eugenie Warner and Jacqueline Hallihan, Senior Consultant and Executive Director, CSS Ascendant compliance services, respectively, discussed six ways firms can improve the exam process. Knowing where you stand in relation to the Rules and Best Practices, and type of exam and particular focus is critical. Monaco guided the audience through important steps when responding to an SEC deficiency letter, such as adjusting and implementing new procedures, and attaching those policies and procedures as exhibits in the response to the deficiency letter.

Warner discussed actions to prevent problems and tips for going forward, such as planning new business and planning lines with compliance having a seat at the table. In the end, all parties agreed that setting the stage with the right culture, preparedness and responsiveness are turning points that continue achieving good exam results.


If you need help with preparing for SEC scrutiny, please explore our compliance management services and contact us.


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