SEC T+1 Sweep Exams Hit Advisers

In July, several registered investment advisers received examination letters from the Securities and Exchange Commission (SEC) related to questions and requests the SEC Division of Examinations had relating to the shortening of the settlement cycle to T+1. From the sweep exam requests, it appears that the Commission is focused on procedures related to their updated trade affirmation process and associated recordkeeping requirements. According to a K&L Gates client alert, the Commission staff are requesting written compliance and operational policies and procedures related to the settlement cycle, any assessments or tests run by the adviser, compliance training records, among other requests. The K&L Gates client alert notes that the requests go “beyond the regulatory requirements for RIAs arising from the T+1 transition.” 

Click here to read a client alert from K&L Gates covering the T+1 sweep exams.