The Securities and Exchange Commission has started it Presence Exams process. I have copies of letters from the New York Regional Office and the Boston Regional Office. The Presence Exams is part of an initiative to conduct “focused, risk-based examinations of investment advisers to private funds that recently registered with the commission.”
The SEC has broken the Presence Exams initiative into three phases: Engagement, Examination, and Reporting. This matches up with the preview offered by Carlo di Florio at PEI’s Private Fund Compliance Forum.
I assume the letters are part of the engagement phase. They include a long list of reference materials about the Investment Advisers Act and compliance.
The SEC has broken the examination phase into 5 higher risk areas for review:
- marketing
- portfolio management
- conflicts of interest
- safety of client assets
- valuation
I assume the other regional offices have sent out the same letter. Please let me know if your firm has received one and if it’s different from the New York or Boston letters. You can leave a comment or email to compliancebuilding@gmail.com.
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