Key takeaways:

• The SEC's Office of Compliance Inspections and Examinations ("OCIE") recently announced the National Examination Program's ("NEP") priorities for 2013 examinations of investment advisers, including private equity firms and hedge fund managers. The report addresses market-wide priorities and areas perceived by the SEC to have "heightened risk."
• The examination priorities for investment advisers include conflicts of interest related to compensation arrangements and allocation of investment opportunities, marketing and performance presentation, and compliance with newly adopted pay-to-play rules. In addition, newly registered investment advisers, the majority of which manage hedge funds and private equity funds, are a key area of focus of OCIE this year.
• Registered advisers to private funds should carefully consider the guidance set forth in the OCIE report in assessing the state of their compliance policies and procedures, as well as in planning for a possible SEC examination.