The Securities and Exchange Commission’s Division of Examinations recently announced its examination priorities for fiscal year 2022: Private Funds; Environmental, Social, and Governance (“ESG”) Investing; Standards of Conduct; Information Security and Operational Resiliency; and Emerging Technologies and Crypto-Assets. The Division seeks to provide investors and registrants with transparency into these areas, and that it expects registrants to “address, manage, and mitigate” risks related to these priorities “with vigilance.”
While similar to examination priorities from years past, this announcement’s focus reflects much of the SEC’s recent activity, as well as its emphasis on emerging issues, such as crypto-assets, enhanced scrutiny over private funds, and ESG. These areas are grounded in promoting compliance, preventing fraud, identifying and monitoring risk, and informing policy. Companies that engage in any of these areas should continue to take note of the Division’s focus, especially as they can be a fertile ground for referrals to the SEC’s Division of Enforcement.
A detailed summary of the Division’s 2022 examination priorities may be found here.