According to Office of Compliance Inspections and Examinations (“OCIE”)
The U.S. Securities and Exchange Commission (“SEC”) regulates approximately 4,000 broker-dealers and more than 12,000 registered investment advisers (“RIAs”) with nearly 66.8 trillion dollars of assets under management. These are the 2018 priorities the SEC recently expressed.
1. Seniors, Retail Investors and Those Saving for Retirement –
OCIE will focus on “main street” investors by examining the calculation of fees and expenses, the disclosure of same, as well as the growth of cryptocurrencies, like Bitcoin, and initial coin offerings (“ICO”).
2. Compliance and Risks to Vital Market Infrastructure –
The SEC plans to examine those entities vital to properly functioning capital markets. These include transfer agents, clearing agencies and securities exchanges as well as their operations and compliance responsibilities.
3. Cybersecurity –
Generally, cybersecurity refers to unauthorized internal and external access to client accounts, trading systems, wrongful asset transfers and data loss. The SEC will continue its initiative to examine access rights and controls, prevention of data loss, incident responses as well as including testing of cybersecurity plans.
4. Anti-Money Laundering (“AML”) –
Examiners will delve into the sufficiency of AML programs, whether they are being followed and whether they address other regulatory obligations, i.e., filing a Suspicious Activity Report (“SAR”).
5. Self-Regulatory Organizations (“SRO”) –
The SEC regulates the following SROs: 1) Financial Industry Regulatory Authority (“FINRA”); and 2) Municipal Securities Rulemaking Board (“MSRB”). The SEC will evaluate their effectiveness of internal policies and procedures, controls and select operations.