Fittingly, the Securities and Exchange Commission (SEC) came into March like a lion. In addition to numerous SEC enforcement actions being filed this month, there were important developments with respect to the SEC’s enforcement and examination programs. This notice briefly describes three of these SEC developments.
March 3: SEC Division of Examinations Releases 2021 Examination Priorities
The SEC’s Division of Examinations (formerly the Division of Compliance and Examinations) released its 2021 Examination Priorities. The Division publishes examination priorities annually to provide insights into its current approach to conducting examinations of registered broker-dealers and investment advisers and to highlight the areas it believes present potential risks to investors and market integrity.
Some of the key SEC examination priorities identified in the release are:
- Compliance with Regulation Best Interest and whether registered investment advisers have fulfilled their fiduciary duties of care and loyalty.
- Whether firm business continuity and disaster recovery plans are accounting for the growing risks associated with climate change.
- Adequacy of the compliance programs of registered investment advisers.
- Compliance with anti-money laundering requirements.
- Firm exposure to LIBOR and firm preparations for the discontinuation of LIBOR.