This year, the Securities and Exchange Commission (SEC) has designated crypto assets as an examination priority for market players.
SEC Exam Priority Include Crypto Assets
The Securities and Exchange Commission’s Division of Examinations revealed its annual examination priorities on Wednesday. This year’s study highlights crypto as one of the top goals.
The SEC’s National Exam Program is overseen by the Division of Examinations, whose “goal is to protect investors, guarantee market integrity, and facilitate responsible wealth creation through risk-focused initiatives,” according to its website.
The examination priorities, according to SEC Chairman Gary Gensler, identify important risk areas that registrants such as investment advisors, broker-dealers, self-regulatory organisations, and clearing companies must address, control, and mitigate with diligence.
One of the five key emphasis topics in the Examination Priorities document is “emerging technologies and crypto-assets.” Pension funds, ESG investment, rules of behaviour, data security and operational robustness are among the others.
“Dealers and registered investment advisors [RAI] will be examined by the Division. These are used cutting-edge financial technology to see if organisations were aware of the unique dangers that these activities pose while developing their regulatory compliance processes,” the SEC said.
According to the report, “the Division will also undertake investigations of mutual funds and ETFs [exchange traded funds] giving exposure to crypto assets to examine, among other things, compliance, liquidity, and operational controls surrounding portfolio management and market risk.”
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