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SEC Division of Examinations announces list of priorities for 2023

On Behalf of | Feb 15, 2023 | Securities and Compliance

The Securities and Exchange Commission’s Division of Examinations announced its priorities for 2023 in a recent news release.

The division’s priorities are published each year to provide an overview of the steps it will be taking to protect investors and the integrity of U.S. capital markets. The SEC said this year’s list demonstrates its ongoing commitment to ensuring compliance with federal securities laws and rules during a time of evolving technologies and new forms of risk.

“Our priorities reflect the changing landscape and associated risks in the securities market and are the product of a risk-based approach to examination selection that balances our resources across a diverse registrant base,” said Division of Examinations’ Director Richard R. Best. “We will emphasize compliance with new SEC rules applicable to investment advisers and investment companies as well as continue our focus on emerging issues and rules aimed at protecting retail investors.”

The SEC released details of the steps it will take to stay abreast of the emerging risks to investors and the markets.

One priority involves new investment adviser and investment company rules. The Division of Examination said it would focus on the new Marketing Rule (Advisers Act Rule 206(4)-1) and whether registered investment advisers have adopted and implemented written policies and procedures that are reasonably designed to prevent violations by the advisers and their supervised persons of the new rule and whether RIAs have complied with the requirements.

The SEC said it would also emphasize protecting retail investors and working families by making sure they are receiving advice in their best interests from their broker-dealers and RIAs. “Specifically, these examinations will focus on how registrants are satisfying their obligations under Regulation Best Interest and the Advisers Act fiduciary standard to act in the best interests of retail investors and not to place their own interests ahead of retail investors”, the commission said.

Other key areas of focus for the year ahead are environmental, social and governance, information security and operational resiliency, and emerging technologies and crypto-assets.

The SEC said the collaborative effort to formulate its annual priorities starts with feedback from examination staff while also including input and advice from the Chair and other Commissioners, staff from other SEC divisions and offices, other federal financial regulators, investors, and industry groups.

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