With its limited resources, the Securities and Exchange Commission's office of compliance inspections and examinations (OCIE) has to be selective in picking which of the thousands of firms under its purview get examined and what compliance issues it zeros in on. A risk-based approach, adopted over the last several years, is vital to those decisions. As OCIE director Lori Richards said in an interview last year, "Our mandate now is to focus on high-risk issues and tackle them quickly." But financial firms' compliance professionals want to know what those priorities are, especially, as Richards said in a speech in New York, "with current unsettled conditions and today's immediate compliance challenges" on their plate. In an address to the Securities Industry & Financial Markets Association's compliance and legal division on Jan. 17, Richards gave those compliance staffers, who she called "important allies in our work to protect investors," an overview of the OCIE's plans for examinations in 2008. This article is based on her prepared remarks.
We are very much informed by events and compliance issues of the recent past, and so the compliance issues that came to have significance in 2007 are foremost on our agenda for our examinations in 2008. Our chairman, Christopher Cox, has asked us to be more transparent about examinations--the process we use, the issues we are concerned about, and what we're finding--and it's in that spirit that I'd like to answer some of the most frequently asked questions that we hear about our examinations
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