The SEC’s exam priorities in 2019 will focus on digital assets, cybersecurity and issues important to retirement savers such as fees, expenses and conflicts of interest, according to the Securities and Exchange Commission’s office of compliance inspections and examinations.
In a report released Thursday, the OCIE said it will prioritize cybersecurity, with an emphasis on proper configuration of network storage devices, information security governance, and policies and procedures related to retail trading information security.
And as the digital asset market continues to grow, the OCIE said it will closely monitor firms that are active in that area. It will conduct examinations focused on portfolio management of digital assets, trading, safety of client funds and assets, pricing of client portfolios, compliance and internal controls, according to its report.
On market infrastructure, exam priorities will continue to look at service providers such as clearing agencies, national securities exchanges and transfer agents.
“OCIE is steadfast in its commitment to protect investors, ensure market integrity and support responsible capital formation through risk-focused strategies that improve compliance, prevent fraud, monitor risk and inform policy,” said Pete Driscoll, OCIE director, in a news release.
“We believe our ongoing efforts to improve risk assessment and maintain an open dialogue with market participants advance these goals to the benefit of investors and the U.S. capital markets.” To protect retail investors saving for retirement, OCIE exams will look at conflicts of interest among investment advisers, how broker-dealers oversee their interactions with senior investors, and how fees are disclosed and calculated.
“As these examination priorities show, OCIE will maintain its focus on critical market infrastructure and Main Street investors in 2019,” SEC Chairman Jay Clayton said in the release.
To formulate the examination priorities, feedback is gathered from examination staff, who also consult with the commissioners, other divisions, the SEC’s investor advocate and other regulators.
In fiscal year 2018, which ended Sept. 30, OCIE completed more than 3,150 examinations, a 10% increase from the previous fiscal year.