SEC’s OCIE Unveils 2018 Exam Priorities

Cybersecurity, cryptocurrencies, and clearing agencies are among the Securities and Exchange Commission’s examination priorities for 2018. The SEC’s Office of Compliance Inspections and Examinations (OCIE) unveiled this year’s examination priorities in its annual report released Feb. 7.

The OCIE says that its priorities for 2018 include:

  • prioritizing cybersecurity, with an emphasis on governance and risk assessment, access rights and controls, data loss prevention, vendor management, training and incident response;
  • monitoring the growth of cryptocurrencies and initial coin offerings and examining registrants involved in their offer and sale to ensure that investors receive adequate disclosures about the risks associated with them;
  • examining entities that provide services critical to the proper functioning of capital markets, including clearing agencies, national securities exchanges and transfer agents, focusing on compliance with recently effective rules;
  • focusing on robo-advisors’ compliance programs, including the oversight of computer program algorithms that generate recommendations, marketing materials, investor data protection and disclosure of conflicts of interest; and
  • examining RIAs and broker-dealers with wrap fee programs to ensure they are acting in a manner consistent with their fiduciary duty.

Also on the list: firms’ efforts to adapt their anti-money laundering programs to address their regulatory obligations; evaluating the effectiveness of the Municipal Securities Rulemaking Board’s operations, internal policies, procedures and controls; and reviewing compliance with applicable anti-money laundering (AML) requirements, including whether firms are appropriately adapting their AML programs to address their regulatory obligations.

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