U.S.: SEC Examinations of Non‑U.S. Advisers

All investment advisers that are registered with the SEC – including those that manage private funds and are based outside of the U.S. – are subject to examination. According to the SEC’s Division of Examinations (Division) 2021 Examination Priorities, there were more than 900 offshore registered investment advisers, managing nearly $12 trillion in investor assets. Given that many of those non‑U.S. advisers manage private funds, such as hedge and private equity funds, and the SEC’s increasingly aggressive approach to private funds in general, it is unsurprising that the Division appears to have stepped up its efforts to conduct examinations of non‑U.S. advisers to private funds. The first article in a three-part series discusses the SEC’s authority to conduct examinations of non‑U.S. advisers and the recent trend of more exams of those advisers. The second article compares SEC exams of U.S. advisers to exams of non‑U.S. advisers and SEC exams to exams conducted by foreign regulators. The third article provides practical tips for non‑U.S. advisers that may face an SEC exam for the first time. See “Emerging Trends and Themes in the SEC’s Oversight of Private Funds” (Jun. 8, 2023) and “SEC Risk Alert Reflects Growing Concerns About and Focus on Private Funds” (Feb. 24, 2022).

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