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NEWSLETTER: As 2023 comes to a close, it’s a good time to look back at lessons learned. The SEC’s Enforcement Division Results are particularly telling about how the Commission views itself as the ultimate arbiter of the securities markets. As always, enforcement cases will provide us with guidance on how to avoid the same trap.
But the Enforcement results, and 2024 Division of Examination priorities, also help us form a roadmap to next year’s compliance challenges. With developments in AI and crypto securities, compliance officers are facing new challenges, it’s important to remember that the fundamentals of compliance never change. At the end of the day, the electronic communications cases brought by the SEC this year were nothing more than traditional books and records cases.
If your firm is using AI or crypto securities, you don’t need to over complicate the role of compliance in their oversight. But if your firm is considering new and emerging technologies, or new lines of business, for 2024 your compliance officer should have a seat at the table in those business decisions.
Speaking of electronic communications, the State of New York has taken action to regulate how and when employers can survey employee devices. This regulation will place investment advisers between a rock and a hard place as they endeavour to comply with conflicting regulators. We’ll be following these developments closely over the new year.
Looking ahead to 2024, our crystal ball tells us that the Commission won’t slow down on its rulemaking agenda. We anticipate that the service provider oversight rule will be adopted this coming year, along with changes to the custody rule. As you begin the new year and begin preparing for your annual Form ADV update, you should be thinking about how these new rules will impact your business.
Have a happy and restful holiday.
Rebecca Thorpe
Chief Executive Officer
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