The SEC kicked off fiscal year 2017 by launching a dedicated inspection team to oversee FINRA, according to Marc Wyatt, director of the agency’s Office of Compliance Inspections and Examinations.  Heading the new group, FINRA and Securities Industry Oversight (FISIO), is Kevin Goodman, head of the agency’s broker-dealer exam program.

Speaking at an industry conference, Wyatt noted that the heightened FINRA scrutiny was prompted by the significant number of SEC examiners who had to be pulled off broker-dealer exams in order to examine investment advisors and investment companies. 

“We took resources from the broker-dealer program and moved them into” the advisor and investment company exams. “As a result of doing that, we’re somewhat more reliant on FINRA. So in relying more on FINRA, we need to make sure we’re enhancing our oversight.” Wyatt noted that together, FINRA and the SEC examine 50% of broker-dealers each year.

As of 10/1/16, OCIE has seen a more than 20% increase in the number of RIA and RIC exams because of new hiring slots that SEC Chair Mary Jo White allocated to OCIE as well as from OCIE’s shifting of examiners.  Over the past 2 years, Wyatt noted that more than 2,000 new advisors registered with the SEC.

The new FISIO team includes “roughly 40 people” throughout the country. The FISIO team will oversee FINRA “both in the regional footprint that it [FINRA] has and ensuring that it’s fulfilling its mandate in terms of evaluating its member broker-dealers.”