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3/31/16 The SEC and Data Analytics

At the SEC’s Chief Compliance Officer event today on the compliance function, two words were repeatedly emphasized: Documentation & Disclosure (write down what you plan to do, tell people what you plan to do, then do it). The SEC’s goal is to protect retail investors and investor savings for retirement. In the SEC’s examination of advisors and broker-dealers, the SEC attempts to balance the need to create greater transparency and accountability while being mindful of the benefits of innovation. The SEC also has concerns with assessing market-wide risks, primarily cybersecurity and liquidity controls.  In selecting candidates for SEC examinations, the SEC makes extensive use of data analytics. This is a major element of their risk-based initiatives. Protecting investors requires this type of higher-level analysis. It was reassuring to hear the SEC talk about protecting individual investors.

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