Each year, the SEC’s Division of Examinations (f.k.a. OCIE) (the “
Division”) releases its priorities for the upcoming year, providing SEC registrants with a helpful tool to assist in managing, reviewing, and updating their compliance programs. The 2021 Examination Priorities (the “
2021 Priorities”), which were released last month, indicate a greater focus on conflicts of interest for broker-dealers (“
BDs”) and registered investment advisers (“
RIAs”); a special emphasis on disclosure of climate and environmental, social, and governance (“
ESG”)-related risks; and concern about risks related to financial technology (“
FinTech”) investments, including digital assets.
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The 2021 Priorities offer another indication of the Division’s sharpening focus on the investment management industry. Despite the significant increase in the number of RIAs and disruptions due to the pandemic, the 2021 Priorities report that the Division still managed to examine 15
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Last week, the Securities and Exchange Commission’s newly renamed Division of Examinations (formerly known as the Office of Compliance Inspections and Examinations) published its 2021 Examination Priorities (“Exam Priorities”). This annual guidance reports on the Division’s accomplishments and rates of examinations for the prior year, and seeks to promote compliance, prevent fraud, identify and monitor risk, and inform policy. It provides industry participants with a road map to plugging any gaps in their compliance.
Many of the Exam Priorities are perennials for example, those related to broker-dealer sales practices and treatment of seniors, and registered investment adviser compliance programs but these are supplemented by the Division’s focus on risks that have emerged in recent years, including information security, digital assets, and operational resiliency in light of climate-change related risks. This