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SEC risk alert for BDs explains how it scopes risk areas for review

Image of a stack of paper files in folders.
Photo: Stephan Schuetze/Bild Zeitung via Getty Images

The SEC’s latest risk alert is designed to assist broker-dealers prepare for exams and understand why they were selected.

The SEC has issued a risk alert directed to broker-dealers that explains how it selects firms to examine and determined the scope of risk areas to review in each examination.

The agency emphasized that it leverages technology to collect and analyze large sets of industry- and firm-level data to help