The Securities and Exchange Commission today announced the Division of Examinations' examination priorities for fiscal year 2027. The annual report sets out focus areas for the Division's work on compliance, fraud prevention, risk identification and monitoring, and Commission policy. The priorities cover examination activities involving more than 34,000 registrants. Those registrants include investment advisers, investment companies, broker-dealers, self-regulatory organizations, clearing agencies, municipal advisors, transfer agents, funding portals and security-based swap entities.
The Division developed the priorities with other SEC divisions and offices. The priorities draw on examination findings, developments in markets, concerns from investors, engagement with industry and emerging capital-market trends. The Division believes the selected areas pose elevated risks to investors or market integrity. The priorities will guide the Division's risk-based examination program during the fiscal year.
The priorities include investment advisers' fiduciary duties, conflicts of interest, recommendations and compliance programs. Retail investor protection will receive attention, especially for products that are complex, carry higher risks or lack liquidity. The Division will also focus on private funds, private credit and other investment strategies involving complexity. Broker-dealer examinations will address financial responsibility, trading conduct, supervision and compliance with anti-money laundering requirements.
Other priorities include operational resilience, cybersecurity and safeguards for customer information. The Division will examine emerging technologies, including super intelligence and other advanced technologies that may influence market operations, compliance, fraud prevention and investor protection. Market-infrastructure risks will receive attention, including reforms to Treasury clearing, tokenization and related changes. The priorities also include supervision of self-regulatory organizations and other market participants with critical roles.
The Division is working to make examination staff more accessible to registrants regarding the receipt of examination observations and engagement during examinations. The Division is also strengthening coordination with SEC policymaking divisions and offices and with other regulators to support consistent application of federal securities laws. SEC Chairman Paul S. Atkins said examinations are a major tool for encouraging legal compliance and protecting investors. Atkins said examinations reveal emerging risks, changes in business practices and market developments throughout the financial system. Atkins said a rigorous, analytically driven examination program strengthens compliance, market integrity and resilience, and investor confidence.
Keith Cassidy, Director of the Division of Examinations, said the examination program must adapt as markets change rapidly. Cassidy said the Division's approach allows staff to recognize developing risks, address new threats and anticipate vulnerabilities affecting investors and markets. Cassidy said ongoing assessments across registrants, products and market activities allow examination resources to target the greatest potential impact while accommodating innovation and market changes.
The Division said the priorities do not cover every matter that examiners will review in fiscal year 2027. The Division said current risk assessments identify the selected areas as requiring additional attention. The Division will continue reviewing compliance with federal securities laws and regulations throughout registrants' activities. The Division expects firms to maintain robust, risk-based compliance programs designed for each firm's business. The Division will reassess risks throughout the year and may change examination focus areas in response to market events, investor concerns, emerging technologies, new products and services, and other securities-market developments.
SEC Announces 2027 Examination Priorities Focusing on Fiduciary Duties, Cybersecurity, and Emerging Tech
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Summary
The U.S. Securities and Exchange Commission (SEC) has outlined its 2027 examination priorities, focusing on fiduciary duties, retail investor protection, and operational resilience. Cybersecurity and emerging technologies, including super intelligence, will also be under review. Market infrastructure risks like tokenization and Treasury clearing reforms are part of the agenda. The agenda includes CFT (Countering the Financing of Terrorism) compliance and covers areas affecting liquidity and crypto markets. SEC Chairman Paul S. Atkins stressed the importance of compliance, while Director Keith Cassidy noted the need for adaptability in fast-moving markets.
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