09 August 2018

“This is not a drill”: CCOs recount their SEC exam experience

By Matt Ahlstrand

What is it like to get a call from the SEC saying they are planning to visit your firm? During our recent webinar, “CCO Speaks – Insights from Recent SEC Examinations,” two Chief Compliance Officers from two different firms, joined Focus 1 Associates’ Toby Cochran, Managing Member and President and me to answer questions like these and more. The firms were examined over roughly the same timeframe, starting in August 2017 and stretching well into the New Year. However, their experiences were different in many ways, ranging in the tone of the ask, sequence of events, extent of requests, management and staff interviews and their overall key takeaways from the experience.

During the webinar, the two CCOs compare notes and share what they expected to be asked but were not. They also discuss their processes for collecting, organizing and delivering the requested information to the SEC.

Both firms considered themselves well prepared. They had completed staff compliance training, worked with a compliance consultant and had conducted mock exams. Both firms credited their SS&C Advent solutions with helping them find and organize the required data.

Still, there were some surprises. At one of the firms, the CCO was able to join the employee interviews. While during the other firm’s examinations, the examiners wanted to speak to the CEO alone, without the presence of the CCO – another indication that no two exams or examiner teams are quite the same.

Every firm registered with the SEC should prepare for their own unique experience.  When we hosted a live poll during the webinar, we learned:

  • 32% of attendees said their firms had never been examined
  • 22% had never gone through an exam as individuals
  • 34% had gone through a mock exam at their firms
  • 56% asserted they felt prepared for an exam if they got the call today – a majority, but still leaving room for many firms to become more prepared.

Regardless of where your firm falls on that readiness-spectrum, our webinar will provide you with a reality check on your state of preparedness. Find out:

  • How much time will you have to prepare?
  • What do the examiners want to see?
  • Who do they want to interview?
  • How long will the entire process last?

Listen to our webinar here. There is no substitute for the voice of experience.