The Securities and Exchange Commission revealed its Office of Compliance Inspections and Examinations (OCIE) priorities for 2020, confirming that regulators intend to continue to scrutinize digital assets and cryptocurrency-related services. In a January 7 announcement, the SEC noted that it will continue to review fintech innovations like digital currencies and electronic investment advice services:
OCIE recognizes that advancements in financial technologies, methods of capital formation and market structures, as well as registered firms’ use of new sources of data (often referred to as “alternative data”), warrant ongoing attention and review. OCIE also will continue to identify and examine SEC-registered firms engaged in the digital asset space, as well as RIAs that provide services to clients through automated investment tools and platforms, often referred to as “robo-advisers.”
In addition to digital assets, OCIE highlighted several other areas of primary oversight concern for 2020, including retail investor protection, market infrastructure, information security risks, AML compliance, and financial industry regulation compliance.
According to the SEC, OCIE announces its examination priorities to provide greater transparency and insight into its risk assessments. OCIE Director Pete Driscoll suggested that the information can assist companies as they work to enhance their regulatory compliance:
“As markets evolve, so do risks and potential harm to investors. OCIE continually works to adjust its examination focus areas to target these risks and publishes its annual priorities to communicate where we see the potential for increased risk and related harm. We hope that this transparency helps firms evaluate and improve their compliance programs, which ultimately helps protect investors.”