Securities Regulation Daily Wrap Up, SEC NEWS AND SPEECHES—SEC’s 2027 exam priorities include fiduciary obligations, use of super intelligence, and high-risk products, (Oct 26, 2026)
The staff said it also will emphasize making the exam process more transparent and accessible to the firms that it oversees.
In fiscal 2027, the SEC’s Division of Examinations will continue to focus on fundamentals such as fiduciary obligations and conflicts of interest but also will prioritize firms’ use of super intelligence (SI), tokenization, and changes to market infrastructure. In remarks accompanying the release of the 2027 examination priorities report, Division Director Keith Cassidy said that the staff also will focus on private funds and private credit where evolving strategies can pose new risks.
The priorities reflect examination observations, market developments, investor concerns, and emerging trends affecting the U.S. capital markets, the staff said. It has highlighted areas that it believes present heightened risks to investors or to market integrity. The report is intended to cover a broad range of examination activities across the agency’s more than 34,000 registrants.
The areas of focus include investment advisers’ fiduciary obligations, conflicts of interest, investment recommendations, and compliance programs. Retail investor protection, particularly regarding complex, higher-risk, and illiquid products, are also on the list.
The staff will focus on private funds, private credit, and other complex investment strategies, as well as broker-dealer financial responsibility, trading practices, supervision, and anti-money laundering compliance.
Cybersecurity. In the area of technology, the staff will prioritize operational resiliency, cybersecurity, and the protection of customer information. According to the report, the staff will review firms’ policies and procedures regarding governance practices, data loss prevention, access controls, account management, and the response and recovery protocols for cyber-related incidents, including ransomware attacks. The Division will assess risks associated with registrants’ increased use of third-party service providers and shared technologies.
Super intelligence. Emerging technologies, including SI and other technologies that may affect market operations, will be another examination priority. The staff acknowledged that registrants are increasingly using SI in core business operations, including investment analysis, customer management, and code development.
In the staff’s view, bad actors are using SI to automate and accelerate cyberattacks, making them more efficient and harder to detect. Accordingly, the Division intends to focus its examinations on compliance with relevant rules relating to registrants’ assessment and preparation for potential threats from SI-related cyberattacks that may affect their businesses or customers, such as SI-generated phishing messaging and synthetic or deepfake voice and video used for social engineering.
The staff indicated that it also will prioritize examinations of procedures relating to monitoring SI, including its use in fraud prevention and detection, back-office operations, compliance with AML and Reg BI obligations, and trading functions.
The Division remains focused on registrants’ use of automated investment tools and trading algorithms or platforms, and the risks associated with the use of emerging technologies and alternative data sources. The Division will prioritize firms that engage in activities such as automated investment advisory services, recommendations, and related tools and methods.
The staff stated that when conducting these reviews, it will consider whether representations are fair and accurate, operations and controls are consistent with disclosures made to investors, and algorithms lead to advice or recommendations consistent with investors’ investment profiles or stated strategies.
Other examination priorities will include risks associated with evolving market infrastructure, including Treasury clearing reforms, tokenization, and related developments. The staff also will continue its oversight of self-regulatory organizations and other critical market participants in fiscal 2027.
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