Liquidity Risk Among New OCIE Priorities for 2016

Stay up-to-date with the latest developments in securities law through access to both news and all statutes and regulations. Find relevant corporate filings through a searchable EDGAR database. And...

By Cameron Finch

Jan. 11 — Liquidity risk management practices, public pension advisers and product promotion are new areas of focus for the Securities and Exchange Commission's Office of Compliance Inspections and Examinations in 2016, the SEC announced Jan. 11.

In 2015, the SEC proposed rules that would require mutual funds and exchange-traded funds to implement liquidity risk management programs and improve fund liquidity disclosures (184 SLD, 9/23/15). The proposal was aimed at the possibility that funds wouldn't be able to redeem client shares in a timely manner during market turmoil.

In 2016, OCIE also plans to look at ETFs and variable annuities—specifically, whether risks and sales strategies are being adequately disclosed. It will also monitor advisers to mutual funds, ETFs and private funds with exposure to potentially illiquid fixed income securities.

Other Priorities

Though many of the examination topics mirror OCIE's 2015 priorities, other new areas of focus for 2016 include public pension advisers, private placements and private fund advisers.

OCIE's priorities list contrasts with the Financial Industry Regulatory Authority recently announced 2016 regulatory and examination priorities. While SEC delineates specific areas of examination focus, FINRA's priorities reflect a more general focus on securities firm culture (03 SLD, 1/6/16).

Separately, OCIE's Office of Market Oversight said its examination priorities for 2016 include:

• exchanges' compliance with undertakings imposed by SEC orders;
• exchange regulatory practices; and
• option exchanges' listing programs and opening processes.


In coordination with OCIE's Technical Controls Program, the office also be looking at exchanges' compliance with Regulation Systems Compliance and Integrity—Reg SCI.

By Cameron Finch

To contact the reporter on this story: Cameron Finch in Washington at

To contact the editor responsible for this story: Phyllis Diamond at

For More Information 
To see the office's letter to exchange chief regulatory officers, go to


Request Securities & Capital Markets on Bloomberg Law