- The SEC released its examination priorities for the coming year.
- In general, these are meant to regulate markets, ensuring they function in an orderly, fair, and efficient manner.
- Crypto monitoring and enforcement action remain major priorities.
The Securities and Exchange Commission (SEC) Division of Examinations has announced its examination priorities for 2024. These priorities aim to inform investors and registrants about the main risks, topics, and focal areas for the upcoming year, targeting emerging and ongoing risk areas. The agency stated that blockchain and crypto assets will be one of the examination priorities in the coming year.
Chair Gensler Explains
SEC Chair Gary Gensler emphasised the Division’s role in safeguarding investors and supporting capital formation.
In examining for compliance with our time-tested rules, the Division helps registrants understand the rules as well as ensures that markets work for investors and issuers alike. The Division’s efforts, as laid out in the 2024 priorities, enhance trust in our ever-evolving markets.
Gary GenslerThe SEC’s Division of Examinations, formerly known as the Office of Compliance Inspections and Examinations (OCIE), is responsible for conducting examinations of entities registered with the SEC. In general, the priorities and purposes of the Division of Examinations include investor protection, maintaining fair, orderly, and efficient markets and facilitating capital formation.
Crypto in the Crosshairs
The SEC stated that inspections will also focus on transfer agents that serve specific types of issuers, especially those releasing microcap and cryptocurrency-related securities, as well as those using new technologies in their roles.
Given the continued volatility of, and activity around, the crypto asset markets, the Division will continue to monitor and, when appropriate, conduct examinations of registrants. Examinations of registrants will focus on the offer, sale, recommendation of, advice regarding, trading in, and other activities in crypto assets or related products.
U.S. Securities and Exchange Commission
Additionally, the Director of the Division, Richard R. Best, highlighted the benefit of making their examination priorities public, noting its value in boosting transparency and helping firms anticipate areas of increased risk.
The Division oversees several entities, including SEC-registered investment advisers and broker-dealers, and employs a risk-based approach to enhance compliance, deter fraud, and guide policy.
Focus On Crypto Risk Management Practices
The Division intends to review those involved in digital assets, focusing on their adherence to compliance measures such as crypto wallet evaluations, custody practices, and risk assessments.
The report said the SEC will check compliance with custody regulations for assets classified as funds or securities under the Investment Advisers Act. Additionally, the Division will inspect the management of risks associated with blockchain and distributed ledger technology, ensuring appropriate compliance procedures and accurate security and disclosure practices.
Credit: Source link
