Late last month, the SEC’s Office of Compliance Inspections and Examinations said its exam priorities for the coming year will include investment advisor conflicts of interest in compensation arrangements and allocation of investments among clients.
The agency is on the lookout for investment advisors who are putting their best investments in the portfolios of clients that make performance-based fees (mostly hedge funds) at the expense of clients who don’t (mostly mutual funds).
Public comment on the SEC request is due in early June, but the agency regularly accepts submissions after the official cut-off date.
To see the full text of the SEC document, click on www.sec.gov/rules/other/2013/34-69013.pdf