The SEC exam priorities for 2024 underscore the importance of compliance and recordkeeping within financial services. The focus will be on practices and products that pose risks to investors or the markets. In light of over $2.6bn in fines due to recordkeeping failures, the SEC will scrutinize unmonitored communication channels and the capture of essential records.
Demonstrating Effective Compliance Programs The SEC’s priorities vary by sector, encompassing investment advisers, broker-dealers, and other market participants like municipal advisers and transfer agents. A common requirement across these sectors is the ability to demonstrate effective compliance programs. This includes ensuring policies and procedures are fit for purpose and operate effectively.
Investment Advisers: A Closer Look For investment advisers, the Compliance Rule mandates the accurate creation and secure maintenance of records. It also demands privacy protection for client records. Marketing practices of investment advisers will be examined, especially their written policies and procedures, and the substantiation of their processes.
Broker-Dealers and Municipal Advisors The SEC’s examination for broker-dealers will assess their compliance with Regulation Best Interest. For municipal advisors, the focus will be on compliance with obligations like documenting advisory relationships and disclosing conflicts of interest. The new MSRB Rule G-46, effective from March 2024, will be a key focus area.
Transfer Agents and the Importance of Recordkeeping Examinations for transfer agents will emphasize processing and transfer procedures, recordkeeping, safeguarding funds and securities, and compliance filings. Recordkeeping is identified as a core competency for financial services firms, crucial for demonstrating compliance with regulatory requirements.
How Theta Lake Can Help Theta Lake, backed by investors like Cisco, RingCentral, Salesforce, and Zoom, offers a suite of compliance and security solutions for modern collaboration platforms. Their services include capturing, archiving, and analyzing communication across various platforms, ensuring compliance with regulations like SEC RegBI. Theta Lake’s STAR3 security and privacy architecture provides a robust framework for data and system security.
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