Article

SEC Compliance Office Announces Examination Priorities for 2019

January 16, 2019

The Securities and Exchange Commission’s (“SEC”) Office of Compliance Inspections and Examinations (“OCIE”) has announced the following examination priorities for 2019:

  • Digital assets
  • Cybersecurity
  • Compliance and risk at registrants responsible for critical market infrastructure;
  • Matters of importance to retail investors
  • Financial Industry Regulatory Authority, Inc. (“FINRA”) and Municipal Securities Rulemaking Board (“MSRB”) operations
  • Anti-money laundering programs

OCIE plans to review digital assets because of the rapid growth of the cryptocurrency market and the potential risks the market may present investors. Digital asset market participants (e.g., broker-dealers, investment advisors) are also on the rise. OCIE plans to continue monitoring how digital assets are sold, traded and managed, as well as examine for regulatory compliance when the products are securities.

Regarding cybersecurity, examiners will look at the configuration of network storage devices, security governance, and the policies and procedures concerning retail trading information security. Further, OCIE will continue reviewing entities that offer critical services to capital markets, and examine FINRA and MSRB’s operations and compliance with appropriate anti-money laundering rules.

Aside from the stated priorities, OCIE plans to review other issues in 2019.