Rise of the Machines: How Big Data is Changing More Than Just Portfolio Management

For years now, the SEC has quietly advanced its data analytics so that the staff is better equipped to examine registrants and identifier outliers. Information from this analysis is used to direct risk-based examinations of registrants, including investment advisers. The Office of Compliance Inspections and Examinations also uses data-rich tools such as the National Exam Analytics Tool (NEAT) to improve its review of areas such as trading. For policy-making efforts, the various SEC divisions rely on the Office of Data Science and the Division of Economic Research and Analysis, which collectively maintain the Quantitative Research Analytical Data Support (QRADS) program. The rule-making divisions can use the data to direct rulemaking or enhance analysis to make rules more effective (and litigation proof).