The SEC’s Office of Compliance Inspections and Examinations (OCIE) has issued a statement announcing that because of health, safety, and firm operations disruption concerns, OCIE has moved to conducting examinations off-site through correspondence unless it is “absolutely necessary” for its teams to be on-site. Recognizing that firms are focused on maintaining operations and ensuring the safety of their employees, OCIE is working with registrants on timing, availability of personnel, and other ways to minimize disruption.
The statement also assures advisers that “reliance on regulatory relief will not be a risk factor utilized in determining whether OCIE commences an examination.” OCIE “encourage[s] registrants to utilize available regulatory relief as needed.” The SEC issued two orders on March 13 providing targeted relief from filing and delivery deadlines for Form ADV and Form PF (The Advisers Act Order) and from in-person board meetings for registered funds and certain other funds relief (The Funds Order).
OCIE is conducting outreach to firms to assess the impacts of COVID-19 and to gather information, including with respect to challenges to operational resiliency. In this context, OCIE may discuss firms’ business continuity plans (BCPs) with them. As the Investment Adviser Association (IAA) recently reported, they understand from OCIE that it presently does not intend to issue written requests to firms or to conduct outreach to smaller or mid-sized firms on their BCPs, except in the context of an exam.