The SEC is looking to hire over 100 additional staff members for its enforcement division, and is proposing a 12% budget increase to finance it.
SEC Chair Gary Gensler testified about these hiring plans to Congress last week when the request was made to increase the SEC budget to $2.4 billion dollars.
As the regulatory environment becomes increasingly complex, and the fines for falling out of compliance growing immense, it is vital that firms are spending the necessary time and resources to properly maintain their compliance program.
A More Complex Regulatory Environment
- As the SEC plans to finalize a host of new rules in 2023, firms are reporting how difficult it is to keep up with the fast-approaching compliance deadlines.
- With the proposed increase in enforcement staff, and the expectation of substantially more on-site examinations for 2023, firms should take important steps to reduce their chances of regulatory headaches.
- The SEC increased enforcement actions by 9% last year, setting a record $6.5 billion for money ordered in actions.
How to Prepare
- Assess Your Compliance Program. How strong are your policies and procedures? Are your policies enforced? Does your firm maintain a proactive culture of compliance? These are the questions that you should be asking yourself. If the answer is “No” or “Maybe,” you should be thinking about a solution that will help change that answer to “Yes”.
- Mock Examinations. There is a reason “Practice Makes Perfect” is considered cliché; it is 100% true. The only way to know that your firm and its employees are prepared for any SEC examination, absent an actual SEC examination, is through a Mock SEC Examination. Utilizing the expertise of a leading third party compliance firm will provide relevant and constructive feedback. The wrong time to make mistakes or find compliance errors is during an actual SEC examination.
- Get Support. The reality of this current regulatory environment makes staying compliant very difficult, especially if you lack the appropriate resources. Staying abreast of relevant regulations and guidance is imperative to maintain a solid compliance program. There are a number of options that firms can select from to accomplish it, such as, (1) hiring additional in-house support, (2) utilizing shared internal resources, or (3) engaging an experienced compliance consultant to provided on-going support.
At Vigilant we can Help!
If you are unsure how your compliance program would perform in the likely event of an SEC examination, contact us!