What You Need to Know
- Gensler noted that there are trade-offs in conducting remote exams.
- SEC staff is developing a proposal on cybersecurity risk governance.
- Also on the SEC’s plate: private funds. In particular the conflicts of interest their managers may have.
SEC Chairman Gary Gensler signaled Tuesday that the agency is considering approving the Financial Industry Regulatory Authority’s plan to continue remote branch inspections into 2022.
“Due to public health concerns, in November 2020, FINRA provided member firms the option to complete branch office inspections remotely for calendar years 2020 and 2021,” Sen. Bob Menendez, D-N.J., said Tuesday during a Senate Banking Committee hearing on SEC oversight.
Menendez asked Gensler: “What’s your assessment of the quality of those remote inspections? Do you think regulators sacrifice any oversight by allowing these remote inspections? And because we’re still facing the delta variant pretty high, is the SEC considering extending remote inspections?”
Gensler responded: “Senator, we are.”
Gensler noted that there are “trade-offs” in conducting remote exams.
FINRA CEO Robert Cook relayed on July 22 that FINRA was in talks with the SEC to allow firms to continue with remote inspections in 2022. Late last year, FINRA adopted temporary supplementary material under Rule 3110 to help firms meet their inspection obligations for calendar year 2020 and 2021.
This rule will expire on Dec. 31. FINRA is “actively engaged in discussions with SEC staff to explore extending the duration of this relief into 2022,” Cook said.