SEC Exams to Focus on New Rules, ESG, Cryptocurrency

The report said the compliance date for the marketing rule was November 4, meaning that the division will now “assess whether RIA has adopted and implemented written policies and procedures that are reasonably designed to prevent violations” of the rule.

The division will also review whether registered investment advisers comply with the rule’s material requirements, the report says, including the requirement that RIAs “have reasonable grounds to believe that they can substantiate material statements of fact and performance advertising requirements, reviews.” , endorsements, and third-party ratings.”

For environmental, social and governance investments, the division will focus on ESG-related advisory services and fund offerings, as well as evaluating the proper labeling of ESG products and whether the recommendations of such products are in the interest of investors.

When it comes to crypto and new technologies, the division said it will look into any broker-dealers and RIAs that use new technologies, such as broker-dealer or RIA mobile apps that provide automated digital investment recommendations. The division also expressed a particular interest in cryptography, pointing to recent developments.

“Given the disruptions caused by recent financial difficulties among cryptoasset market participants, the division will continue to monitor and, if necessary, conduct checks on potentially affected or affected registrants,” the report says.

ESG and crypto assets were also top priorities for 2022.

In addition, the division said it would continue to focus on RIA’s private foundations. The reviews will review RIA’s fiduciary responsibilities and assess risks, including conflicts of interest, compliance programs, fees and costs, custody, the agency’s new marketing rule, and the use of alternative data.

“In a time of rising markets, evolving technologies, and new forms of risk, our expertise division continues to protect investors,” SEC Chairman Gary Gensler said in a press release on Tuesday. “In meeting 2023 priorities, the division will help ensure compliance with federal securities laws and regulations.”

Other priorities include enforcement of the BIA, fiduciary duties and the CRS form; and reviewing how we protect investor information and prevent interruption of critical services.

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