SEC cracks down on fee transparency

The US Securities and Exchange Commission (SEC) announced it will crackdown on financial product providers' fee disclosures the year ahead in a bid to protect mum and dad investors.

The SEC made it clear that one of its main priorities this year is to protect retail investors, including people's retirement savings, as well as tightening the reins around cryptocurrency.

The securities regulator said it will closely examine product providers' disclosure and calculation of fees, expenses and other miscellaneous items they charge investors.

It warned it will keep a closer eye on how product providers supervise its representatives selling products and services.

The SEC said it will also continue to monitor the growth of cryptocurrencies and initial coin offerings by examining registrants that offer the products so that investors receive adequate disclosures about the risks associated with these investments.

Among its other priorities, the regulator will focus on the entities that provide services "critical to the proper functioning of capital markets."

This includes clearing agencies, national securities exchanges, and transfer agents, focusing on certain aspects of their operations and compliance.

Cybersecurity is also an area of interest, as programs initiated by the SEC will prioritise governance and risk assessment, access rights and controls, data loss prevention, vendor management, training and incident response.

Anti-money laundering (AML) programs are currently underway, to ensure firms are appropriately adapting their AML programs to meet regulatory obligations.

The SEC's Office of Compliance Inspections and Examinations (OCIE) body has been tasked to carry out these priorities.

OCIE director Pete Driscoll, said as the markets continually evolve and products and services available to investors adapt, OCIE remains committed in its risk-based examination program to prioritising the interests of retail investors and examining those aspects of securities firms posing risks to investors and the proper functioning of capital markets.

SEC chair Jay Clayton said: "I appreciate OCIE's dedication to maximising the effectiveness of their resources with a keen eye toward asset verification, market infrastructure, and duties owed to retail investors."

Read more: SECOCIESecurities Exchange CommissionJay ClaytonPete DriscollFee transparency
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