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SEC to Place More Focus on Climate Risks in 2021 Exam Priorities

March 9, 2021

According to a new report highlighting 2021 priorities for the Division of Examinations (DOE), this year’s SEC exams will place more emphasis on climate-related risks. The focus on environmental, social, and governance issues as they pertain to registered brokers and advisors comes as the commission continues to assess how firms are complying (or not) with Regulation Best Interest.

The DOE wants to intensify its focus both on products widely available (including open-end funds and ETFs), as well as those products that may be available only to accredited investors. Foreside’s Les Abromovitz, Senior Director, shared with, “The priorities laid out in the report were likely influenced by the turmoil of the previous year.”

Les also shares, “The priorities also were shifting along with broader perspectives on climate change, noting the SEC’S 2020 priorities report didn’t mention climate risks at all (though it did refer to the need for examining the accuracy of RIA disclosures in new types of investment strategies that could include sustainable investing using ESG criteria).”

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