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Groundhog Day for Compliance & the SEC in 2021

février 11, 2021

Groundhog Day for Compliance & the SEC in 2021

It’s almost mid-February, and we’ve come out of the January haze. Now we have a bit more information on where the year is headed. It’s not too late to look back at prominent compliance themes and trends from 2020 and how they will help us prioritize the compliance and SEC landscape for 2021. Putting aside living in the current climate of COVID-19 and our remote workplaces, our compliance world was fairly predictable, manageable and transparent. But we’re still not sure whether we can accurately predict six more weeks of winter or if spring is around the corner with the compliance crystal ball…

Moving forward to 2021 and with a change in the SEC administration, it is integral to note which topics will remain the same and which may be unpredictable entering the new year. First, let’s start with the easier, perennial topics that will not change regardless of the shift in administration:

  1. Continued focus on cybersecurity and information security
  2. Safeguarding client assets and other custody issues
  3. Adequacy of disclosures will continue
  4. Conflicts of interests and sales practices
  5. Protection of retail investors, seniors and saving for retirement

The previous SEC administration focused on private funds, while the past four years changed to retail protections. Let’s take a look at topics that surely may be unpredictable in 2021:

  1. Will there be an end to “rule easing” that we’ve had over the past four years?
  2. A shift to tougher rulemaking
  3. More, new rulemaking
  4. Possibility of changes to Reg BI

Thinking about some of the tougher questions, one trend over the last few years was OCIE’s shift to encourage firms to take direct corrective actions and response to deficiency letters. If firms can fix the problem, isn’t that better than enforcement? Things to think about:

  1. New regulations
  2. Examination trends (will there be more?)
  3. Enforcement trends
  4. OCIE’s concerns about adequate staff surely will continue
  5. OCIE’s highlighted focus on training

Looking ahead and knowing that your resources and time are limited, where should compliance teams focus their attention?

  • This is a very prudent time to button up your compliance program and take a fresh look at the accuracy of regulatory filings
  • Identify risks, such as conflicts, and update related policies to mitigate the risks
  • Look at your marketing disclosures
  • Think about RegTech to improve operational efficiency
  • Test fee calculations and consistency of portfolios adhering with objectives and mandates
  • Make sure you remain true to your exam response letters: no recidivism because it may be a big issue


The more things change, the more they stay the same in so many ways (a’ la Groundhog Day). This is a pivotal time for CCOs and compliance teams, and hopefully things will come into focus soon with SEC published priorities for 2021 and a new Chairman’s agenda in place. Reach out to CSS’s regulatory compliance experts to prepare for both the predictable and unpredictable compliance climate: info@cssregtech.com.