SEC assessing impacts of coronavirus on advisers

The Securities and Exchange Commission's Office of Compliance Inspections and Examinations is reaching out to investment advisers to assess the impacts of the coronavirus pandemic, according to the Investment Adviser Association.

"As it has done during other times of market stress, OCIE is actively engaged in on-going outreach and other efforts with many registrants to assess the impacts of COVID-19 and to gather information, including challenges with operational resiliency," OCIE said in a statement last month. "In furtherance of these efforts, OCIE may discuss with registrants the implementation and effectiveness of registrants' business continuity plans, particularly in the interests of protecting investors and the integrity of the markets."

OCIE may discuss firms' business continuity plans with them, but it's IAA's understanding that OCIE presently does not intend to issue written requests to firms or to conduct outreach to smaller or mid-sized firms on their business continuity plans, except in the context of an exam, Karen Barr, president and CEO of the IAA, said in an email.

These efforts are "par for the course" for the SEC, Ms. Barr added. "They conducted similar outreach with respect to Hurricane Sandy, for example, and are also in regular contact with larger firms as a way to help keep them informed of market and other developments."

An SEC spokeswoman declined further comment Thursday.

Steve Nadel, a partner in Seward & Kissel's investment management group, said the COVID-19 pandemic presents unique challenges for firms and their business continuity plans. Many firms have to develop a plan for what happens when a key employee or one of their loved ones gets sick in the midst of a pandemic, he said.

"That's probably the biggest differential: the human element," Mr. Nadel said. "Most business continuity plans I think generally focus on the infrastructure element, not the human element."