In 2019, OCIE will prioritize certain practices, products, and services that it believes present potentially heightened risk to investors or the integrity of the U.S. capital markets. Designed to support the SEC’s mission to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation, the six themes for OCIE’s 2019 Examination Priorities, which include perennial risk areas and developing products and services, are:
- Matters of importance to retail investors, including seniors and those saving for retirement;
- Compliance and risk in registrants responsible for critical market infrastructure;
- Select areas and programs of FINRA and MSRB;
- Digital Assets;
- Cybersecurity; and
- Anti-Money Laundering.
These priorities are not exhaustive and will not be the only issues OCIE addresses in its examinations, risk alerts, and investor and industry outreach. While the priorities drive many of OCIE’s examinations, the scope of any examination is determined through a risk-based approach that includes analysis of the registrant’s operations, products offered, and other factors. This risk-based approach often results in examinations that address key aspects of the SEC’s regulatory oversight, such as the disclosure of services, fees, expenses, conflicts of interest for investment advisers, and trading and execution quality issues for broker-dealers.
OCIE’s risk-based approach, both in selecting registered entities to examine and determining the scope of risk areas to examine, remains flexible in order to cover emerging and exigent risks to investors and the marketplace as they arise. OCIE is continually evaluating changes in market conditions, industry practices, and investor preferences to assess risks to both investors and the markets.
Although change may be continual, OCIE’s analytic efforts and examinations remain firmly grounded in its four pillars: promoting compliance, preventing fraud, identifying and monitoring risk, and informing policy.