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San Diego, Calif. (PRWEB) December 27, 2012
In a recent speech, Carlo di Florio, Director of the SEC Office of Compliance Inspections and Examinations (OCIE) discussed conflicts of interest and risk governance. Mr. di Florio stated that conflicts of interest have recently become an area of increased scrutiny for SEC examiners as well as enforcement investigators. The SEC and the Financial Industry Regulatory Authority (FINRA) have begun to conduct special sweep examinations to identify and control conflicts of interest.
Since investment advisors have an obligation to put client interests ahead of their own, it is important to implement programs and procedures to detect and discourage situations where personal interests are placed before those of clients. Whenever individuals place their own interests (or those of someone else) ahead of clients, they breach their fiduciary duty and create conflicts of interest.
Mr. di Florio recommended that investment advisors establish programs that allow advisors to continually scan firm operations to discover ongoing and potential conflicts and put in place procedures for eliminating or mitigating them. Business Compliance Partners offers written supervisory procedures for investment advisors through its document management platform.