SEC creates unit to tackle emerging risks

Dan Barnes

The Securities and Exchange Commission has created the Event and Emerging Risks Examination Team (EERT) in the Office of Compliance Inspections and Examinations (OCIE). The EERT will actively engage with financial firms about emerging threats and current market events, and will provide expertise and resources to the SEC’s regional offices when critical matters arise.

OCIE is responsible for conducting examinations of SEC-registered investment advisers, investment companies, broker-dealers, self-regulatory organizations, and transfer agents, among others. OCIE uses a risk-based approach to allocate resources to in order to fulfill its mission of promoting compliance with the US securities laws, preventing fraud, monitoring risk, and informing policy.

The EERT will focus on implementing OCIE exam priorities, including those identified in OCIE’s annual examination priorities publication. The EERT will help to ensure, through examinations and other firm engagement and monitoring activities, that firms are better prepared to address exigent threats, incidents, and emerging risks. The EERT will also work with OCIE staff to provide expertise and support in response to significant market events that could have a systemic impact or that place investor assets at risk, such as exchange outages, liquidity events, and cyber-security or operational resiliency concerns.

Adam Storch, SEC

The SEC has said that Adam Storch will be associate director of the EERT. In this role, Storch will oversee a dedicated, multidisciplinary team of specialised examiners, industry experts, accountants and quantitative analysts.

“I thank Pete Driscoll, Marc Berger and their colleagues for driving this important initiative forward,” said SEC chairman Jay Clayton. “As recent events have demonstrated once again, market and operational risks can emerge suddenly. We should be working to increase our ability to react, including bringing our various resources to bear to these situations.”

OCIE director Peter Driscoll said, “The EERT will assist OCIE in the fulfillment of its mission, including protecting the clients and customers firms serve, and enhance its ability to effectively respond to exigent threats and incidents in our markets.”

Previously, Storch was a senior advisor to the director of OCIE, where he focused on risk, strategy, and innovation, and led several initiatives to protect investors. He first joined the Commission as the managing executive and chief operating officer of the Division of Enforcement.

Storch has also held several executive roles in the private sector, including chief of staff and chief operating officer of Legal and Compliance at Marsh & McLennan Companies and vice president of the Business Intelligence Group at Goldman Sachs.

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