The Securities and Exchange Commission’s Division of Examinations released its 2024 examination priorities this week.
The release seeks to inform investors and registrants of the key risks, examination topics, and priorities that the division plans to focus on in the upcoming year. This year, the examinations will prioritize areas that pose emerging risks to investors or the markets in addition to core and perennial risk areas.
“The Division of Examinations plays a critical role in protecting investors and facilitating capital formation,” Securities and Exchange Commission (SEC) Chair Gary Gensler said. “In examining for compliance with our time-tested rules, the Division helps registrants understand the rules as well as ensures that markets work for investors and issuers alike. The Division’s efforts, as laid out in the 2024 priorities, enhance trust in our ever-evolving markets.”
The division conducts examinations and inspections of SEC-registered investment advisers, investment companies, broker-dealers, transfer agents, municipal advisors, securities-based swap dealers, clearing agencies, and other self-regulatory organizations. It prioritizes examinations of certain practices, products, and services that it believes present potentially heightened risks to investors or the integrity of the U.S. capital markets.
“Continuing to make our examination priorities public increases transparency into the examination program and encourages firms to focus their compliance and surveillance efforts on areas of potentially heightened risk to retail investors,” Division of Examinations’ Director Richard Best said. “We hope that aligning the publication of our examination priorities with the beginning of the SEC’s fiscal year will provide earlier insight to registrants, investors, and the marketplace of adjustments in our areas of focus year to year.”
The scope of any examination includes analysis of an entity’s history, operations, services, products offered, along with other risk factors.
The effort to formulate the annual examination priorities starts with feedback from examination staff. The division also gathers input and advice from the SEC Chair and other Commissioners, staff from other SEC divisions and offices, other federal financial regulators, investors, and industry groups.