The Securities and Exchange Commission, through its National Examination Program, has published its examination priorities for 2013. They include both market-wide topics, as well as issues specific to broker-dealers, clearing agencies, exchanges, self-regulatory organizations, investment companies, and private funds. Activities now allowed by the JOBS Act will also spark some specific reviews.

Broad priorities include fraud detection and prevention, corporate governance and enterprise risk management, conflicts of interest, and technology controls. Those efforts include:

A risk-based approach to targeting registrants for fraud detection that encourages tips and complaints from whistleblowers and investors.

Meeting with senior management, boards, and affiliates to discuss how a firm governs and manages financial, legal, compliance, operational, and reputation risks.

In 2013, the National Examination Program may also conduct examinations on the governance and supervision of information technology systems, with attention paid to operational capability, market access, and information security, outage risks, and compromised data.

Highlighted among the market-specific priorities are: presence exams for newly registered private fund advisers; payments by advisers  to entities that distribute mutual funds; risk-based examinations of securities exchanges and the Financial Industry Regulatory Authority; and transfer agent reviews to ensure accurate recordkeeping, and the safeguarding of assets.

The Investment Adviser/ Investment Company examination program is responsible for reviews of nearly 11,000 investment advisers managing nearly $50 trillion for investors. Focus areas this year include:

A risk-based asset verification process to confirm the safety of client funds and compliance with custody requirements.

A search for undisclosed compensation arrangements, which may include undisclosed fee or solicitation arrangements, referral arrangements, and receipt of payment for services allegedly provided to third parties.

Assessing the accuracy of advertised performance. Staff may also review changes in advertising practices related to the JOBS Act, which requires an easing of rules restricting general solicitations.

Also under review is whether money market funds adequately conduct stress tests, and that advisers comply with the SEC's recently adopted “Pay to Play rule,” intended to prevent them from getting government business in return for political contributions.

The Broker-Dealer Program,the Commission's examination program for more than 4,600 registered broker-dealers with approximately 111 million customer accounts, will be on the lookout for affinity fraud, fraud targeting seniors, and unsuitable recommendations of higher yield products. Upon approval of a final rule relating to the JOBS Act's exemption from registration for qualified “crowdfunding” transactions, its staff intends to conduct reviews of the entities participating in those new arrangements.