SEC Division of Examinations Releases 2021 Examination Priorities

Authored by Susan Grafton, Mark Perlow, Mike Sherman, Aaron Withrow, Alejandra Freer, Charlotte Hopson, and Louis Rosenbaum

The Securities and Exchange Commission’s Division of Examinations (EXAMS) published its report on 2021 Examination Priorities on March 3, 2021. The 2021 Examination Priorities cover eight broad topics:

• The protection of retail investors, including seniors and those saving for retirement (with an emphasis on standards of conduct owed to retail investors);
  
  
• Information security and operational resiliency (with particular focus on cybersecurity in remote operations and climate change-related risks);
  
  
• Financial technology (Fintech) and innovation, including digital assets;
  
  
• Anti-money laundering (AML) programs;
  
  
• The London Inter-Bank Offered Rate (LIBOR) transition;
  
  
• Additional matters relating to investment advisers and investment companies;
  
  
• Additional matters relating to broker-dealers and municipal advisors; and
  
  
• Market infrastructure functions, including Regulation Systems Compliance and Integrity (SCI) and transfer agents.

While many of the above topics also were included in the 2020 OCIE Examination Priorities, this year’s examination priorities include three notable additions: new Regulation Best Interest (Reg BI) and Form CRS; the LIBOR transition; and the risks and market volatility associated with the COVID-19 coronavirus pandemic. EXAMS continues to emphasize vigilance in the consideration of environmental, social and governance matters, and continues to monitor activity surrounding “meme stocks.