The Office of Compliance Inspections and Examinations (OCIE) of the U.S. Securities and Exchange Commission (SEC) released its annual list of 2020 Examination Priorities on Jan. 7, 2020. Many of OCIE’s 2020 examination priorities, including the focus on retail investors, fraud, conflicts (and related disclosures), among others, are perennial risk areas that OCIE routinely prioritizes. While the SEC release discusses new issues in greater detail than continuing areas of interest, practitioners must continue to focus on these areas and monitor whether the SEC provides guidance throughout the year.
Most securities industry participants (with a specific emphasis on registered investment advisers (RIAs), broker-dealers, registered investment companies, municipal advisors, and transfer agents) are subject to examination. Such examinations remain firmly grounded in four pillars: promoting compliance, preventing fraud, identifying and monitoring risk, and informing policy. Accordingly, OCIE has continued its practice of organizing its priorities around thematic areas. This year’s areas are:
- Retail Investors, Including Seniors and Those Saving for Retirement
- Information Security
- Financial Technology (Fintech) and Innovation, Including Digital Assets and Electronic Investment Advice
- Additional Focus Areas Involving RIAs and Investment Companies
- Additional Focus Areas Involving Broker-Dealers and Municipal Advisors
- Anti-Money Laundering (AML) Programs
- Market Infrastructure
- Focus on Oversight of FINRA (Financial Industry Regulatory Authority) and MSRB (Municipal Securities Rulemaking Board)