Two Halloween announcements by securities regulators may frighten investment advisers.  The October 31 statements from the SEC and the North American Securities Administrators Association (NASAA) suggest that federal and state authorities are ramping up their examination and enforcement regimes, which might result in more RIA regulatory oversight in the coming year.

In its annual enforcement report, NASAA indicated that in the wake of many advisers’ transition from federal registration to state registration under the Dodd-Frank Act, state regulators have gotten comfortable with their new responsibilities.  NASAA reported that in 2012 states caused 3,564 licenses to be withdrawn – an increase of 27% over 2011.

And Halloween 2014 might be coming early.  Investment News reported that at a meeting of the Regulatory Compliance Association Inc., Drew Bowden, the head of the SEC’s Office of Compliance, Inspections and Examinations, told a group of private fund compliance professionals that examining many of the approximately 4,000 SEC-registered RIAs that have never been examined will be a priority for the SEC next year.

Closer examination of these claims, however, reveals a slightly different reality under these colorful costumes:  NASAA also reported that an additional 736 licenses were denied, revoked, suspended or conditioned, a decline from the 2011 number.  In his remarks, Bowden elaborated that OCIE’s examiners will not focus on all 4,000 unexamined firms, but rather on the roughly 1,200 of those firms that have been registered for more than three years and are based in the United States.  And, it might be a trick for the regulators to obtain the resources necessary to sustain an enhanced level of oversight and enforcement; trying to fulfill an increased examination schedule with no increase in staff is no treat.

Clearly regulators are turning up the heat on investment advisers, but announcing it is not quite the same thing as doing it.  It remains to be seen whether the grim reaper will be ringing your firm’s doorbell next year.