Amid ongoing federal government shutdown risks and the close of its fiscal year, the U.S. Securities and Exchange Commission’s (SEC) Division of Examinations (Exams) recently announced its fiscal year (FY) 2024 priorities. According to Exams, “this year’s examinations will prioritize areas that pose emerging risks to investors or the markets in addition to core and perennial risk areas.” In addition to key focus areas outlined based on the types of entities subject to examination, Exams identified the following risks to various market participants as FY 2024 priorities:
- Information Security and Operational Resiliency: Firms need to have systems, policies and people in place to maintain service during volatile events.
- Crypto Assets and Emerging Financial Technology (FinTech): Firms must ensure rigorous compliance with applicable professional standards, statutes, and rules even as their business models involve cutting edge products and technology.
- Regulation Systems Compliance and Integrity (Reg SCI): Firms must ensure they invest in and maintain systems that adequately support key market functions and improve resiliency.
- Anti-Money Laundering (AML): Firms must understand and adhere to the Bank Secrecy Act and tailor programs to meet their particular risk profiles.
Of note, although Exams identified environmental, social and corporate governance (ESG) as a key priority in FY 2022 and FY 2023, it did not explicitly identify it as a priority for FY 2024.
Holland & Knight LLP – Jessica B. Magee and Scott Mascianica
October 26 2023