Replies to post #42690 on Yippy, Inc. (YIPI)

[326T658]

As a result, when SFX staff
detect violations that the SROS did not, SEC cannot readily determine
what caused the SROS to miss the violations-the examination methods
used, the way in which the methods were implemented, or other factors.
(See pp. 20-21.)
For example, GAO randomly selected 94 SEC routine oversight examinations,
of which 66 contained violations that SEC found but the SRO
missed. In only 6 of the 66 cases did SEC state the cause for the missed
violations. SEC requested explanations from the SROS in the other 60
cases. An SRO official said that missed violations are usually minor and
may be from a different time period or sample than the SRO reviewed.
Because SEC does not directly determine why SROS miss certain brokerdealer
violations, it may lose opportunities to recommend actions to
improve SRO examination methods.