the staff of the Ridgewood blog
Ridgewood NJ, Acting Attorney General Matthew J. Platkin and the Bureau of Securities (“the Bureau”) within the Division of Consumer Affairs today announced the release of the Bureau’s Annual Investment Adviser Examination.
The Bureau, which regulates New Jersey’s securities industry, uses the examination as a risk assessment tool for the almost 900 registered registered investment adviser firms that manage hundreds of thousands of clients’ investment accounts in the State.
“The annual examination is a critical part of investor protection. It helps the Bureau proactively identify and address potentially problematic practices before investors are harmed,” said Acting Attorney General Platkin. “New Jersey’s Uniform Securities Law and related regulations permit the Bureau to conduct both routine and for-cause examinations of investment advisers, as well as broker-dealers.”
Firms are required to provide responses to questions about their business activities, including portfolio composition, compliance with regulatory requirements, and customer complaints. The questions are updated each year to reflect changes in the investment adviser industry and the Bureau’s examination priorities.
“The examination helps the Bureau track emerging trends in the securities market, assess risks to investors, and ensure compliance with securities law and industry standards,” said Acting Consumer Affairs Director Cari Fais. “It is a key tool in the Bureau’s efforts to protect investors.”
The information collected in the annual examination allows the Bureau to create risk profiles and ramp up oversight when necessary to protect investors and also helps the Bureau identify industry trends as they are emerging and assess the risks they may pose to investors.
This year’s examination questions include inquiry about investment adviser management of non-fungible tokens – NFTs, which are increasing in popularity within the securities, cryptocurrency, and digital space.
The examination also reemphasizes the importance of policies and procedures aimed at preventing and detecting violations of the laws and regulations governing investment advisers.
“Required policies and procedures aid in the prevention and detection of Securities Law violations, benefitting both large and small investment advisers,” said Acting Bureau Chief Amy Kopleton. “When reasonably implemented, they provide guidance and help firms align with industry best practices.”
The investment adviser examination can be accessed on the Bureau’s website at www.NJSecurities.gov beginning June 14th.