Registered entities continued to be a significant focus of the US Securities and Exchange Commission's (SEC's or Commission's) enforcement and rulemaking programs in 2022, and we expect similar attention this year. The SEC's Division of Examinations recently issued its 2023 Examination Priorities report, highlighting a number of areas that will draw increased scrutiny from the Examinations staff and are likely precursors to future enforcement sweeps and referrals. Similarly, the Financial Industry Regulatory Authority's (FINRA's) January 10, 2023 Report on Examination and Risk Monitoring Program identified many areas of focus for broker-dealers that will garner continued attention, including Regulation Best Interest, Consolidated Audit Trail, mobile apps, and cybersecurity. Last year will be remembered for aggressive rulemaking and enforcement, with the SEC securing recordbreaking penalties. FINRA's new Sanction Guidelines, which in part eliminated upper limit fine ranges for mid-size/large firms and catalogued several additional nonmonetary sanctions, suggest that FINRA too will be escalating sanctions. Please see full Publication below for more information.
Source: Current Developments in Sec and Finra Examinations & Enforcement 2022–2023 – A Special Report for Investment Advisers and Broker-Dealers