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SEC & FINRA RELEASE 2017 EXAM PRIORITIES BY DANIEL G. VIOLA The Securities and Exchange Commission (“SEC”) released their Exam Priorities for 2017. The SEC's 2017 priorities are organized around the following areas: (1) examining matters of importance to retail investors; (2) focusing on risks specific to elderly and retiring investors; and (3) assessing market- wide risks. FINRA also issued its 2017 Regulatory and Examinations Priorities Letter, which identifies compliance, supervision and risk management as areas of focus. FINRA will be introducing a compli- ance calendar and a directory of service providers as tools to assist firms. FINRA will also be initiating electronic, off-site reviews to supplement traditional on-site cycle examinations. These off-site exams will affect only a select group of firms that are not cur- rently scheduled for a cycle exam in 2017. The SEC priorities address issues across a vari- ety of financial institutions, including investment advisers, investment companies, broker-deal- ers, transfer agents, clearing agencies, private fund advisers, national securities exchanges and municipal advisers. Under each category, a number of key exam areas include: — . Protecting Retail Investors: mw Electronic Investment Advice Wrap Fee Program m Exchange-Traded Funds m Never-Before Examined Investment Advisers m Recidivist Firms and Their Employees ai] fl Multi-Branch Advisers Share Class Selection 2. Focusing on Senior Investors and Retirement Investments: m RelIRE— Retirement-Targeted Industry Reviews and Examinations m Public Pension Advisers m Senior Investors 3. Assessing Market-Wide Risks: m Money Market Funds m Payment for Order Flow m Clearing Agencies m FINRA m Regulation Systems Compliance and Integrity m Cybersecurity mw National Securities Exchanges m Anti-Money Laundering 4. Other Initiatives: m Municipal Advisers m Transfer Agents m Private Fund Advisers The FINRA Examination Priorities Letter includes a long list of topics that FINRA will prioritize this year, including product suitability, excessive and short-term trading of long-term products, outside business activities, social media and electronic communications, liquidity risk, credit risk poli- cies, cybersecurity, segregation of client assets, Regulation SHO, and anti-money laundering and suspicious activity monitoring. FINRA’s Top Five Exam Priorities Include: m High-Risk and Recidivist Brokers m Bad Sales Practices m Practices that Lead to Financial Risk m Conduct that Enhances Operational Risks m Market Manipulation To read the SEC & FINRA’s 2017 Exam Priorities, please go to the links below: https://www.sec.gov/about/offices/ocie/ national-examination-program-priorities-2017.pdf http: //www.finra.org/sites/default/files/2017- regulatory-and-examination-priorities-letter. pdf Daniel G. Viola is a Partner and the Head of the Regulatory and Compliance Group. He structures and organizes broker- dealers, investment advisers, funds and regularly counsels investment professionals in connection with regulatory and cofporate matters. Mr. Viola served as a Senior Compliance Examiner for the Northeast Regional Office of the SEC, where he worked from 1992 through 1996. During his tenure at the SEC, Mr. Viola worked on several compliance inspection projects and enforcement actions involving examinations of registered investment advisers, ensuring compliance with federal and state securities laws. Mr. Viola’s examina- tion experience includes financial statement, performance advertising, and disclosure document reviews, as well as, analysis of investment adviser and hedge fund issues aris- ing under ERISA and blue sky laws. Dan can be reached at 217.573.8038, or dviola@ sglawyers.com. Gregory Hartmann Joins Sadis & Goldberg’s Corporate and Financial Services Practices Sadis & Goldberg LLP is proud to announce the addi- tion of Gregory Hartmann as member of the firm’s Corpo- rate and Financial Services Groups. Mr. Hartmann has extensive experience rep- resenting assets managers, investment banks, insurance companies, and other clients, on a wide variety of transactional and regulatory matters. “Based upon his extensive industry experience, Greg has a comprehensive understanding of the chal- lenges that businesses face and a talent for help- ing them understand their legal risks and manage them, particularly in the financial services industry” said Ron Geffner, a member of the firm's Executive Committee. “His in-house experience gives him a unique capability to anticipate what our clients need and advise them most effectively.” Prior to joining the firm, Mr. Hartmann was Corpo- rate Counsel and Vice President in the Retirement Law Group of the Prudential Insurance Company of America, where he supported the pension risk transfer business, including U.S. pension buy-outs and international longevity reinsurance. Before that, Mr. Hartmann was Deputy General Counsel at Pine- Bridge Investments and Associate General Counsel at AIG Investments, where he was the head of the legal department’s Asset Management Group in New York. At AlG, Mr. Hartmann advised on registered and private funds, managed accounts, regulatory and compliance issues, and sales and marketing matters. Before joining AIG, Mr. Hartmann was the gen- eral counsel of a private equity and hedge fund manager, where he built the legal and compliance department. Prior thereto, he was general counsel of an investment bank, and also a venture capital firm. Earlier in his career, Mr. Hartmann was in private practice at Weil, Gotshal & Manges, and also at Shea & Gould, in New York. Mr. Hartmann earned his J.D. from Columbia University’s School of Law, his M.A. from North- western University, and his B.A., magna cum laude, from the University of Notre Dame. Mr. Hartmann is a member of the American College of Investment Counsel, and is admitted to prac- tice in New York. HOUSE_OVERSIGHT_019862