The U.S. Securities and Exchange Commission (SEC) on Wednesday made crypto-assets, information security, the private fund sector, and environmental, social and governance issues among its top review priorities for market participants such as brokers and investment advisors in 2022.
The SEC’s review division, tasked with monitoring risks and ensuring investor protection, will also review whether the funds’ proxy votes are consistent with their ESG-related disclosures and mandates, and whether misrepresentations of ESG (environmental, social, and governance) factors have been taken into account. The SEC has highlighted areas that have emerged as priorities for the top regulator of U.S. markets since the Democrats took over in 2021, from climate and crypto to procedures to address phishing and other cyberattacks.
The SEC said that SEC auditors will focus on custody arrangements for crypto assets and will evaluate crypto sales, advice and trading. The agency also targeted private funds in its outlook for the 2022 exams, with investment advisors’ plans to review portfolio strategies, risk management, disclosures and conflicts of interest.
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