March 31, 2022
SEC’s examinations division will also review whether funds’ proxy votes align with ESG-related disclosures and mandates
The US Securities and Exchange Commission (SEC) on Wednesday flagged crypto-assets, information security, the private fund sector and environmental, social and governance (ESG) issues among its examination priorities in 2022.
The SEC’s examinations division, tasked with monitoring risks and ensuring investor protection, will also review whether funds’ proxy votes align with their ESG-related disclosures and mandates, and whether there are misrepresentations of ESG factors being considered, the agency said in a statement.
The agency’s exam outlook highlighted areas that have emerged as priorities for the top US markets regulator since Democrats took the helm in 2021, from climate and crypto to broker-dealers’ procedures to handle phishing and other cyber attacks.
The SEC’s examiners will focus on custody arrangements for crypto assets and will assess any sales, recommendations, advice and trading of crypto, the SEC said.
The agency also targeted private funds in its outlook for 2022 exams, with plans to review investment advisers’ portfolio strategies, risk management, disclosures and conflicts of interest.
The examinations will target market participants such as broker-dealers and investment advisers.
- Reuters with additional editing by Sean OMeara