SEC Office of Compliance Inspections and Examinations Announces 2018 Examination Priorities

Feb 9, 2018

Topics: Compliance | exams |

The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations (OCIE) has announced its 2018 examination priorities. This year the focus will be on:

  1. protecting retail investors,
  2. monitoring sales of cryptocurrency and initial coin offerings,
  3. compliance and testing of anti-money laundering programs,
  4. cybersecurity and data protection,
  5. compliance risk in critical market infrastructure, including transfer agents and Systems Compliance and Integrity (SCI) entities, and
  6. continuing to oversee FINRA and MSRB effectiveness.

While Registered Investment Advisers should critically review firm policies to identify possible gaps within the areas related to the 2018 OCIE examination priorities, it is important to note that the list is by no means exhaustive. Investor protection is an ongoing focus and will likely cover areas previously highlighted in OCIE’s annual priorities such as firm expense policies and fee calculations. For the first time, cryptocurrency, initial coin offerings and related products will receive increased attention from OCIE. Firms engaging in cryptocurrency offerings should be properly informing investors of the product risks and be aware of an evolving regulatory stance with limited available guidance to date. Exams will also continue to focus on firm adoption and review of anti-money laundering regulatory requirements. Cybersecurity programs will be a continued focus in 2018; advisers should have robust internal policies that focus on assessing firm risk, preventing data loss, providing training, managing vendors and ensuring a thorough incident response process. The priority list also notes that the quality of FINRA examinations, MSRB operations and critical market infrastructure entities such as clearing agencies, national securities exchanges, and transfer agents, will be examined in order to gauge rule effectiveness.

Read the press release issued by the SEC at: https://www.sec.gov/news/press-release/2018-12.

SUBSCRIBE

WANT TO TALK TO THE TEAM DIRECTLY?

GET IN TOUCH