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NEWSLETTER: 2022 is drawing to a close. And while we wait for the 2023 Priorities from the Division of Examinations, we are taking stock and looking at what lies ahead for the regulator. The SEC will continue to protect the public against fraud and misconduct by ramping up its enforcement division. With recent focus on the regulator’s lack of oversight leading to the collapse of FTX, the SEC will no doubt continue to focus its efforts in the digital markets arena and take a strong enforcement posture through 2023.
We anticipate a continued aggressive approach to rulemaking. While Chair Gensler has shown a strong propensity for rulemaking during his tenure, this approach is a continuation from the Clayton administration, in response to controversy over the constitutionality of key provisions of the SEC’s enforcement program. As we discuss, the SEC will learn the fate of its in-house administrative law judge system and whether enforcement cases may continue to be brought in house. The outcome of this case will determine the SEC’s enforcement options in the future and the influence the rulemaking agenda.
In practical terms, we don’t expect much to change. We are likely to see more of the same when it comes to examination themes and enforcement actions. As the year concludes, firms should build on the progress that they made in 2022 and continue to focus on exam preparedness. As you complete your annual review and prepare to file your Form ADV in 2023, be diligent in your disclosures and your documentation, as those are your best defense to any SEC inquiry.
In the meantime, Happy Holidays from everyone at Bovill. Enjoy the break!
Rebecca Thorpe
Chief Executive Officer
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