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A Look at SEC Examination Priorities: Information Security & Crypto and Financial Technology

Aug 8, 2023

Hear TaNeka Ray with EisnerAmper Compliance Desk share insights about the SEC’s examination priority for information security and crypto and financial technology. This video series covers SEC regulatory and compliance insights to help you navigate a changing regulatory landscape. (Video length is 3 minutes 12 seconds.)


TaNeka Ray:

Hello. Welcome back to EisnerAmper's SEC Regulatory Compliance Series. My name is TaNeka Ray, and I work in the regulatory compliance group here at EisnerAmper. Thank you for joining me.

Today I'll cover the last of a look at the SEC exam priorities as it relates to advisors where I will focus on information, security, and operational resilience and crypto assets and emerging financial technology. For those of you who are tuning in for the first time, I encourage you to go back and watch the first and second video of the web series, where I focus on the amended marketing rule, RIAs to private funds, standards of conduct and ESG investing.

Now, let's get started. The SEC has identified information, security and operational resilience as a focus area for the 2023 examination year. During examinations, the SEC will review the practices implemented to prevent interruptions of advisory services and protect investor records and assets. Specifically, the SEC will assess rather, one, the advisor has implemented adequate policies, procedures, and responses to cyber related incidents. In doing so, the SEC will review the policies and procedures to make sure they are reasonably designed to safeguard customer records and information, including records stored on site with a third party vendor, and rather advisors properly disclose the location of such records.

Two, because many advisors rely on third party providers, the SEC will assess advisors oversight of third party providers products and services. The SEC will assess rather advisors have experienced any cybersecurity issues related to the use of third party providers, and rather advisors have engaged in any unauthorized third party providers. And lastly, the SEC will assess the advisor's operational resilience planning.

The next focus area for the SEC is crypto assets and emerging financial technology. The SEC will focus its exams on new or never before examined advisors offering crypto assets and advisors who use new financial technology. During examinations the SEC will focus on crypto and crypto related assets investment advice. Specifically the SEC will assess rather, one, advisors have met and followed the applicable standard of care when giving investment advice. Two, rather advisors conduct routine reviews and updates of their compliance disclosures and risk management practices.

And lastly, the use of digital engagement practices and the impact on investors. If your firm is looking to automate your compliance programs, feel free to contact me as we offer EisnerAmper Compliance desk technology, that will provide the services and solutions to address your compliance needs. That concludes our look at the SEC examination priorities. Again, my name is TaNeka Ray with EisnerAmper, and don't forget to connect with me on LinkedIn. Thank you for watching.

The information provided in this video is not to be construed as an interpretation of the regulatory requirements, application of the regulations to a specific business, or legal advice.

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TaNeka Ray

TaNeka Ray is a Senior Manager in the firm's Global Compliance & Regulatory Solutions Group & and has over 5 years of experience.

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