SEC to Increase Onsite Advisor Exams

The Securities and Exchange Commission plans to “significantly” increase onsite exams of advisors within the next six months, Natasha Greiner, deputy director of the SEC’s Division of Examinations, said Thursday.

In 2022, the SEC examined approximately 15% of RIAs.

This exam rate was “achieved despite continued growth,” which is now more than 15,500 RIAs, Greiner said during a meeting of the SEC’s Investor Advisory Committee.

“Going forward, as the industry continues to grow and change, maintaining our coverage ratio can only be achieved with sustained investments in human capital and technology resources,” Greiner said.

Under the Consolidated Appropriations Act of 2023, the SEC received $2.2 billion, an increase of $210 million from fiscal year 2022.

Greiner said the funding boost would allow the agency to hire additional staff, many of which will be within the exam division.

SEC Chairman Gary Gensler noted during his opening remarks at the meeting that advisors “play an expansive and expanding role in our markets and in Americans’ lives.”

Investment advisors, Gensler said, “have 53 million separately managed accounts, of which 51 million are individual accounts. They advise hedge funds, mutual funds, money market funds, and other institutional investors. In total, they have more than $125 trillion of assets under management.”