Last year, the US Securities and Exchange Commission (SEC) Office of Compliance Inspections and Examinations (OCIE) rattled the private equity industry when it named fees and expenses in private equity as one of its top examination priorities for 2015.
This year’s priorities reveal that fees will remain a focus, but that the regulator has expanded its scope to fees, controls and disclosure for all private fund advisers, not solely private equity, according to a notice released earlier this week.
OCIE began demonstrating its interest in the private fund universe beyond private equity when it concluded a sweep of private real estate advisers last year, and is expected to move on to other asset classes like infrastructure and private debt in the near future.
OCIE will also target never-before-examined registered investment advisors in 2016. In 2015, the regulator only listed never-before-examined investment companies as a priority.
Unsurprisingly, cybersecurity will also continue to be a top concern for the SEC in 2016. In September, OCIE launched its second initiative to examine cybersecurity compliance and controls, and is expected to test and assess the implementation of cybersecurity procedures at approximately 100 investment advisers and broker-dealers.