THE BROKER‐DEALER EXAMINATION PROGRAMME OF THE SEC
| Pages | 386-394 |
| DOI | https://doi.org/10.1108/eb024897 |
| Date | 01 April 1996 |
| Published date | 01 April 1996 |
| Author | MARY ANN GADZIALA |
| Subject Matter | Accounting & finance |
Journal of Financial Regulation and Compliance, Vol. 4 No. 4, 1996, pp. 386-394
©Henry Stewart Publications, 1358-1988
THE BROKER-DEALER EXAMINATION PROGRAMME
OF THE SEC
Received (in revised form): 19th August, 1996
MARY ANN GADZIALA
MARY
ANN GADZIALA
IS ASSOCIATE DIRECTOR AT THE US
SECURITIES AND EXCHANGE COMMISSION IN
WASHINGTON DC. SHE IS RESPONSIBLE FOR
COMPLIANCE, INSPECTIONS AND
EXAMINATIONS OF BROKER-DEALERS, SROS
AND TRANSFER AGENTS. SHE IS ALSO CHIEF
LEGAL ADVISER ON FINANCIAL SERVICES
AND FINANCE ISSUES AT HIE DEPARTMENT
OF
THE TREASURY. SHE ADVISES THE RTC
OVERSIGHT BOARD, THE FEDERAL RESERVE
BOARD
AND IS A MEMBER OF THE AMERICAN
BAR ASSOCIATION AND WOMEN IN HOUSING
AND FINANCE.
SHE CAN BE CONTACTED AT US SEC, 450 5TH
STREET, NW, MAIL STOP 9-5, WASHINGTON,
DC
20549,
TEL.
(202)
912
0087,
FAX.
(202)
942
9641.
ABSTRACT
The examination of
broker-dealers
is an
integral
part of
the
United States Securi-
ties and Exchange
commission's
overall
responsibility
to enforce securities laws,
protect investors, and ensure the main-
tenance of fair and
orderly
markets.
This
programme continues to evolve to keep
pace
with
dynamic market
developments.
This paper
provides
an
overview
of the
broker-dealer examination process, and
discusses
several new
developments
in the
examination
programme.
Particular focus
is
directed
to the
oversight
of internal con-
trols
and risk
management,
and
review
of
sales practices
and
supervisory
procedures.
Finally, there is a discussion of
efforts
undertaken to
coordinate examinations
by
various state, federal and
self-regulatory
authorities.
INTRODUCTION
The US Securities and Exchange
Commission (SEC)1 is charged with
the responsibility for enforcement of
securities laws, and the oversight and
regulation of broker-dealers. A major
part of that responsibility involves the
examination of broker-dealers, both
in the ordinary course and in connec-
tion with potential violations of law.
The examination responsibility has
become much more challenging with
the onset of technological advance-
ments and the proliferation of inno-
vative and highly complex financial
products. Transactions are moving
with lightning speed, volume has
multiplied exponentially, and the
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