SEC FY 2027 Examination Priorities | Key Takeaways
SEC Releases
Introduction
On October 23, 2026, the SEC’s Division of Examinations (“Division”) released its Fiscal Year 2027 Examination Priorities, identifying areas the Division believes currently present heightened risks to investors or the integrity of the U.S. Capital Markets. The priorities are intended to help guide the Division’s risk-based examination program during the fiscal year.
The FY 2027 priorities continue several areas of focus from prior years, including fiduciary obligations, compliance programs, never-examined Advisers, Registered Investment Companies (“RICs”), Broker Dealer practices, cybersecurity, and protection of customer information.
At the same time, the Division has placed additional emphasis on areas reflecting changes in products, business practices, and technology, including economic conflicts of interest, difficult-to-trade and illiquid investments, Private Credit, Third-Party Service Providers, super intelligence (“SI”), and evolving market infrastructure.
As with prior years, the SEC emphasizes that the Examination Priorities are not an exhaustive list of matters that may be reviewed during an examination. The Division may adjust its focus throughout the year in response to emerging risks, market events, investor concerns, new products and services, and other developments.
Key Takeaways
1. Registered Investment Advisers (“RIAs”)
For RIAs, the FY 2027 Examination Priorities continue to emphasize fiduciary obligations, conflicts of interest, compliance program effectiveness, investment recommendations, Private Funds, and Advisers that have never been examined.
- Investment Recommendations & Complex Investments: The SEC will examine how Advisers evaluate investment recommendations, including whether investments are consistent with a client’s objectives, risk tolerance, liquidity needs, time horizon, and costs. Particular attention will be given to illiquid, difficult-to-trade, unusual, and complex investments, including certain Private Fund and BDC investments, Private Company investments, and complex ETFs and options.
- Private Funds: For Private Fund Advisers, the SEC will focus on investment and fund-level risks, allocations, debt and fund-level lines of credit, affiliated Service Providers, and fee and expense calculations.
- Compliance Programs: The effectiveness of an Adviser’s compliance program remains a core examination focus. The SEC will consider whether policies and procedures are appropriately designed, implemented, and reviewed in light of the Adviser’s actual business and conflicts. The Division will also look at how compliance programs have adapted when Firms change their business models, add services or asset classes, grow through acquisitions, or otherwise expand their operations.
- Never-Examined & Recently Registered Advisers: The Division will continue prioritizing Advisers that have never been examined, particularly recently registered Advisers, including their regulatory compliance and processes for identifying, addressing, and disclosing risks and conflicts.
- Fiduciary Duty & Conflicts of Interest: The SEC will continue to focus on whether Advisers are meeting their fiduciary obligations, including identifying and addressing conflicts of interest. The FY 2027 priorities specifically highlight economic conflicts involving fees and expenses, fee rebates, cash management, deposits, withdrawals, and quid pro quo arrangements.
2. RICs, Including ETFs and Mutual Funds
For RICs, the FY 2027 priorities focus on compliance programs, disclosures, fees and expenses, portfolio management, complex or illiquid investments, and leverage.
- Fees, Expenses & Disclosures: The SEC will review Fund fees and expenses, waivers and reimbursements, as well as whether disclosures, filings, investment strategies, and marketing materials accurately reflect how the Fund is actually managed.
- Complex & Illiquid Investments: The Division will continue focusing on RICs holding complex, less liquid, or illiquid investments, including Private Credit, with attention to valuation, redemptions, conflicts, and risk disclosures.
- Novel Strategies & Leverage: The SEC will examine Funds utilizing novel or complex investment strategies and funds with leverage vulnerabilities, including BDCs and inverse and leveraged ETFs. RICs operating under exemptive orders will also receive attention regarding implementation and compliance with those orders.
- Never-Examined RICs: RICs that have never previously been examined will continue to receive examination attention.
3. Broker-Dealers
For Broker Dealers, the FY 2027 priorities emphasize financial responsibility, trading practices, Regulation Best Interest (“Reg BI”), AML, and supervision.
- Financial Responsibility: The SEC will continue examining compliance with the Net Capital Rule and Customer Protection Rule, including related risk-management controls, liquidity, and recent amendments involving customer reserve computations and U.S. Treasury clearing.
- Trading & Execution: The Division will focus on trading practices, including order routing and execution, best execution, extended trading hours, and the pricing and valuation of illiquid securities, including private credit and private equity.
- Regulation Bi: Reg BI remains a significant focus, particularly recommendations involving complex or higher-risk products, account and rollover recommendations, conflicts of interest, reasonably available alternatives, and the Care and Disclosure Obligations.
- AML: Broker-Dealer AML programs will continue to be examined for whether they are appropriately tailored to the Firm’s business and risks, including customer due diligence, suspicious activity reporting, foreign omnibus accounts, and risks associated with foreign-based companies.
- Supervision: The SEC will assess whether Broker-Dealers maintain effective supervisory systems, written policies and procedures, and internal controls, including those applicable to new business activities and investment products.
Vigilant’s Conclusion
While many of the SEC’s FY 2027 Examination Priorities build upon areas identified in FY 2026, there are several areas where the Division has expanded or sharpened its examination focus.
For RIAs, one of the most notable developments is the SEC’s more specific emphasis on economic conflicts of interest. Although conflicts and fiduciary obligations were already a significant FY 2026 priority, the FY 2027 priorities identify specific areas such as fee rebates, fee and expense calculations, cash management, deposits, withdrawals, and quid pro quo arrangements. The Division also specifically references its June 2026 Risk Alert concerning economic conflicts of interest observed during examinations.
The SEC has also expanded its focus on difficult-to-trade, unusual, and illiquid investments, while providing greater specificity around Private Fund and BDC investments, Private Company investments, and certain complex ETFs and options. For Private Fund Advisers, the FY 2027 priorities further emphasize fund-level and investment-level risks, including allocations, debt, fund-level lines of credit, affiliated service providers, and fee and expense calculations.
Another important area is the SEC’s continued focus on whether compliance programs evolve with the Firm. The FY 2027 priorities specifically identify Advisers that have changed business models, added clients, asset classes, or services, grown through mergers or acquisitions, or expanded across geographically dispersed offices. The Division will assess whether compliance programs have adapted to those changes and whether new conflicts have been identified and addressed.
For RICs, the FY 2027 priorities continue several FY 2026 areas but place additional attention on Private Credit, redemptions, valuation, conflicts and risk disclosures, novel or complex strategies, leverage vulnerabilities, and compliance with exemptive orders.
For Broker-Dealers, the SEC continues its focus on financial responsibility, trading practices, and Regulation Best Interest, while the FY 2027 priorities also provide heightened attention to AML and supervision, including risks associated with foreign omnibus accounts, foreign-based companies, new business activities, and new investment products.
Perhaps the most notable cross-cutting development is the SEC’s expanded discussion of SI and emerging technology. The Division notes that registrants are increasingly using SI for research, drafting, coding, client communications, advisory and portfolio management functions, and compliance monitoring and surveillance. The SEC is therefore examining how these technologies affect Firms’ ability to comply with existing, technology-neutral obligations.
These developments reinforce the importance of having a compliance program that is not simply designed to meet regulatory requirements, but is appropriately tailored to the Firm’s current business, products, services, conflicts, and operational risks.
Vigilant supports RIAs, RICs, and Broker Dealers in preparing for these examination priorities through Outsourced CCO and CCO Support, Compliance Program Reviews, Mock Examinations, SEC Examination Support, Marketing Review, and other tailored Compliance Services. Vigilant can work with Firms to assess whether their existing compliance program, policies and procedures, disclosures, and controls appropriately address the areas identified by the SEC and the Firm’s specific business activities.
With the FY 2027 priorities now established, Firms may want to consider using the SEC’s priorities as an opportunity to proactively review their compliance programs rather than waiting until an SEC examination is underway.