The Office of Compliance Inspections and Examinations (OCIE) of the SEC released its list of compliance goals for 2020, citing digital assets and service providers as areas of concern. SEC Reveals its Cryptocurrency Priorities for 2020.
Along with its views on the governance requirements of digital assets, The Compliance Inspections and Examinations (OCIE) publication also shared the evolution of the agency’s approach since 2018.
The department said it will continue to focus on retail investor protection. Assessments of reports related to fees, expenditures, any conflicts of interest and AML will be included in in-field assessments.
In 2019, OCIE reduced its emphasis on cryptography and made its strategy to track market participants clearer in areas such as portfolio management, trading practices, the safety of client funds, pricing, compliance, and internal controls.
In 2020, it clearly states that its focus will be on transfer agents who develop blockchain technology and those who provide digital assets services.
SEC Chairman Jay Clayton said:
“OCIE’s 2020 examination priorities identify key areas of risk, both existing and emerging, that we expect self-regulatory organizations (SROs), clearing firms, investment advisers and other market participants to identify and mitigate. I applaud OCIE’s thoughtful, strategic and efficient focus, which is critical to the fulfillment of the SEC’s mission and our service to Main Street investors.”
While it also mentioned that priorities for 2020 are not exhaustive, it will consider input and advice from the Chairman and other Commissioners, staff from other SEC divisions and offices, and other federal financial regulators
“The digital assets market has grown rapidly and presents various risks, including for retail investors who may not adequately understand the differences between these assets and more traditional products.”