The Securities and Exchange Commisson to Continue Regulatory Examinations

In light of COVID-19 and nationwide health concerns, the U.S. Securities and Exchange Commission (“SEC”) has announced that its Office of Compliance and Examinations (“OCIE”) remains fully operational and continues to execute on its investor protection mission. OCIE will continue conducting regulatory examinations off-site via correspondence. The SEC continues to emphasize that its operations remain fully functional during this time in its SEC Coronavirus-19 Reponse.

While the SEC has shifted to telework, the agency recognized that many of its registrants have done the same and may have adjusted normal business practices to maintain continuity of operations during this time. The announcement states:

“Recognizing these conditions and priorities, OCIE is working with registrants to address the timing of its requests, availability of registrant personnel, and other matters to minimize disruption.  Specifically, we will work with registrants to ensure that our work can be conducted in a manner consistent with maintaining normal operations, and importantly, necessary or appropriate health and safety measures”

OCIE also points out that it remains engaged in outreach efforts with registrants to evaluate the impacts of COVID-19 by gathering information and looking at operational resiliency. Registered Investment Advisers (“RIA firms”) should be aware that, “In furtherance of these efforts, OCIE may discuss with registrants the implementation and effectiveness of registrants’ business continuity plans, particularly in the interests of protecting investors and the integrity of the markets,” as stated in the announcement. In addition, the SEC encourages the use of regulatory relief where needed and notes that “…reliance on regulatory relief will not be a risk factor utilized in determining whether OCIE commences an examination.”