On Jan. 7, 2020, the Office of Compliance Inspections and Examinations of the Securities and Exchange Commission (OCIE) released its 2020 Examination Priorities. The list is published annually to provide clear guidance to professionals and to highlight pertinent risks to investors.
Several of the Examination Priorities parallel those of 2019, with expanded emphasis on certain areas of concern. OCIE’s 2020 Examination Priorities are:
- Retail Investors- Like recent years, protection of Main Street investors, especially seniors and people saving for retirement, is of ongoing interest to OCIE. Examiners will continue to evaluate pricing, fee disclosures, and conflicts of interest relating to these investors.
- Market Infrastructure- Examiners will focus on the functioning of service providers which are essential to capital markets, including national securities exchanges, clearing agencies, and transfer agents.
- Information Security and cybersecurity practices across the industry.
- Investment Adviser, Investment Company, Broker-Dealer, and Municipal Adviser Focus Areas- For registered investment advisers, the focus is on new registrants and others who never have been examined, especially those advising retail investors and private funds.
- AML Programs- Like previous years, OCIE is prioritizing anti-money laundering efforts.
- Fintech and Innovation- In the rapidly developing digital landscape, OCIE is remaining alert to the risks emerging in financial technologies, like the digital assets market and robo-advising.
- FINRA and MSRB- OCIE will continue its management of the Financial Industry Regulatory Authority and the Municipal Securities Rulemaking Board.
WHAT DOES THIS MEAN FOR ME?
If one or more of the above circumstances applies to your firm, you may be more likely to be examined in 2020. OCIE will likely release more in-depth information on the 2020 Examination Priorities in the coming weeks, which will provide further details on who may be examined this year.
Fairview Investment Services provides comprehensive and ongoing compliance services, including onsite examination support. Contact Fairview Investment Services with questions concerning the OCIE examination process or for additional information about the 2020 Examination Priorities.
Fairview Cyber specializes in creation, testing, and maintenance of meaningful cybersecurity programs for financial industry businesses, in compliance with SEC regulations. Reach out to Fairview Cyber for more information about achieving comprehensive and compliant cybersecurity practices.