TREND #1

Shifting Work Environment

47% of compliance professionals anticipate a hybrid policy mandating a mix of in-office and remote.*

FACTORS TO CONSIDER:

• The past year has proven remote work isn’t as remote of an idea as we previously thought – and this has caused a shift both in work functionalities and compliance needs. Because of this new trend, compliance  teams are now tasked with shifting their mindset around new processes and procedures, putting in place the structure to continue mitigating risk despite fluctuating work environments.

• A lack of in-office interactions and supervision paired with home-life distractions and privacy issues has created a unique monitoring environment which relies more heavily on individual accountability.

• Technology will be huge in allowing compliance teams to continue monitoring and mitigating risk, while simultaneously creating automation in historically manual processes.

TREND #2

Cryptocurrency

83% of compliance professionals feel monitoring cryptocurrency is or will soon become a compliance priority.*

FACTORS TO CONSIDER:

• Not all (of the over 9,000) cryptocurrencies are created equal. While some are classified as a commodity, others are often classified as regulated securities.

• So much around cryptocurrency remains uncertain in terms of compliance, and the lack of a globally homogenous approach signifies just how much progress there still is to make in this space.

• Cryptocurrency is just one type of asset within a decentralized financial ecosystem (looking at you NFTs) which puts regulators in a position to adapt and adjust rules and regulations to become inclusive of  what is quickly becoming a normalized investment for portfolios.

TREND #3

Tracking Material Non-Public Information (MNPI) – SEC Priority

86% of compliance professionals believe MNPI is a priority for 2022 and have already created policies around tracking such information.*

FACTORS TO CONSIDER:

• When thinking about MNPI it’s crucial to understand the entire scope of potential risk. Ask yourself: Is there any non-public information available within your firm that can influence the market? If yes, are you actively monitoring expert networks, television appearances, Reddit, etc.?

• Connecting the dots across the various MNPI data points is crucial to fully mitigating risk.

• Monitoring trading activity is a great first step, but it’s crucial for firms to have clear policies and procedures in place that state exactly how you go about  monitoring and supervising such activity.

TREND #4

Data Management

71% of compliance professionals consider data management a top 2022 challenge.*

FACTORS TO CONSIDER:

• Siloed data points create a disjointed picture for compliance teams. Aggregating data within one holistic platform or solution ensures a clear picture for compliance teams to view if there have been any potential risks.

• Layered on top of the sheer amount and complexity of the data, privacy rules (Regulation S-P) and laws (like GDPR) compound the difficulty compliance data management presents.

• Regulators are now asking firms about their automation processes, creating new pressures for firms to find the right tool to effectively, adequately, and efficiently manage and monitor data.

TREND #5

Future Regulatory Outlook

57% of compliance professionals
consider their SMCR operating model ineffective or not mature enough.*

50% of compliance professionals
consider preparing for the SEC’s New Marketing Rule a top compliance priority of 2022.*

FACTORS TO CONSIDER:

• As we wrap up year 2 of the SMCR Ruling, the industry has begun to see a shift between technical practice vs. industry standard – with many nuances still being addressed as we head into year 3 and 4.

• In certain cases, firms have been able to choose between the new and old advertising and marketing rules based on compliance resources and needs. However, based on one of the SEC’s FAQs the New Marketing Rule must be adopted in its entirety by November 2022.

• The time to start addressing these rulings is now.