SEC EXAMS Director Says Communication is Key to Improve Compliance
SEC Division of Examinations Acting Director Keith E. Cassidy urged clear communication and transparency between the Division and registrants to address pressing compliance challenges facing the financial industry during this time of rapid change.
At the 2024 National Compliance Outreach Seminar, Mr. Cassidy highlighted current challenges complicating compliance efforts—among them the fast-paced evolution of the industry, remote work, digital finance and rising cyber threats. He said the SEC was pursuing several strategies to address these issues, including proactive communication of the Division's priorities, publishing risk alerts to guide firms in risk management and maintaining open lines of dialogue through outreach events.
Specifically, he cited Division efforts to:
-
Enhance Communication with Registrants. Mr. Cassidy said the Division accelerated the release of its annual examination priorities document to align with the fiscal year, providing compliance officers with earlier insights into regulatory focus areas to better inform their budget and resource planning.
-
Issue Risk Alerts. Mr. Cassidy noted that the Division issued over 70 risk alerts since 2011, to share key observations and emerging risks identified during examinations. Mr. Cassidy recommended that compliance teams incorporate these alerts into their internal policies, using the Division's insights to strengthen areas of potential vulnerability. He noted that risk alerts provide a valuable perspective on the Division's priorities, helping firms self-assess and make preemptive adjustments.
-
Increase Outreach. Mr. Cassidy highlighted the importance of outreach events in fostering dialogue between the SEC and industry compliance teams. He said the Division plans to expand these programs to promote stronger compliance frameworks.
Mr. Cassidy encouraged firms to leverage SEC resources to strengthen their compliance practices and foster a culture of accountability and transparency within the industry.