Despite “stresses” brought on by the coronavirus pandemic and the agency’s “rapid moveto a mandatory telework environment,”Securities and Exchange CommissionChairman Jay Clayton touted in mid-October the agency’s accomplishmentsin 2020.
Looking to 2021, the agency wants toadd more examiners to help monitor advisor and broker-dealer compliance withRegulation Best Interest and Form CRS.
While the pandemic “significantlyimpacted how we do our work, it didnot negatively impact the work itself,”Clayton stated at the annual SECSpeaks conference, held virtually by thePractising Law Institute.
The agency’s “planned oversight,
examination, rulemaking, and enforce-
ment work continued with vigor, rigor
and transparency,” just as the agency
“added to its workload,” Clayton said.
The securities regulator’s enforce-
ment division brought over 700 actions
in FY20, “a significant percentage” of
which occurred after March 15 — when
the agency began to telework.
Financial remedies reached more than$4 billion; “The Division’s activities during the pandemic have included threedozen trading suspensions, six COVID-related fraud actions, and over 150 newlyopened COVID-related investigationsand inquiries,” Clayton reported.
The Commission also awarded 39individual whistleblowers approximately $175 million — “more, much more,than in any prior fiscal year,” he said.
MORE EXAMINERS NEEDED IN 2021
As to exams, in FY2020 the Office
of Compliance Inspections and
Examinations conducted exams that
covered 15% of all SEC-registered invest-
ment advisors, Clayton stated. OCIE is
conducting most exams remotely.
According to the agency’s 2021 budget
request, the agency wants to add four
positions to its exam division in 2021 to
address “emerging risks facing market
participants.” Three of those examiners
will focus on investment advisor and bro-
ker-dealer compliance with Regulation
Best Interest and Form CRS, as well as
cyber and information security risks.
The size of the SEC-regulated com-
munity continues to grow in volume and
complexity and significantly exceeds the
office’s bandwidth at existing resource
levels, the agency states in the request.
At the beginning of FY 2021, OCIE
anticipates that it will oversee more than
13,800 investment advisors with over
$85 trillion in assets under management;
nearly 775 investment company com-
plexes managing over 15,000 investment
company portfolios; over 3,700 broker-
dealers with more than 155,000 branch
offices; approximately 550 municipal
advisors; 23 national securities exchang-
es; and more than 300 transfer agents.
The Investment Management
Division, meanwhile, reviewed disclo-
sures relating to more than 10,700 funds,
By Melanie Waddell
SEC Continued With ‘Vigor’ Despite
The agency examined 15% of all RIAs in FY 2020 and wants to hire more
examiners next year to help monitor Reg BI, Form CRS compliance.
Jay Clayton, chairman of the U.S. Securities and Exchange Commission (SEC)