The SEC’s Division of Examinations has released the 2027 list of Exam priorities. The guide, released on October 23, 2026, highlights the areas that will receive increased scrutiny in the upcoming year.
Several priorities from previous years remain areas of scrutiny as was listed in our blog post on the SEC 2026 Exam Priorities. However, this year’s report includes three key considerations for advisers and broker-dealers to pay close attention to in 2027.
– Economic conflicts of interest
– Cybersecurity and emerging technology
– Financial responsibility requirements for broker-dealers
Small to mid-sized firms will benefit from a thorough review of these new priorities and address any gaps in their programs that may affect their regulatory obligations.
New Areas of Interest
Economic Conflicts of Interest
A June 2026 SEC Risk Alert outlines the findings from SEC Exam staff, citing repeated violations in inadequate disclosures on economic conflicts of interest in Form ADV Part 2A, billing and fee calculations, share class selection and more.
Firms are encouraged to take extra steps to avoid any violations by auditing cash sweeps and fund arrangements, reviewing disclosure documents and making sure they are consistent across the firm, test fee billing against the agreement and other precautions to bridge any gaps. Read more on this HERE.
Cybersecurity, Regulation S-P and AI
Cybersecurity and operational resiliency are an ongoing SEC priority, however, there will be enhanced focus on AI-enabled threats such as deepfake impersonations, and phishing to assess how firms safeguard customer information from these threats.
In 2027, the SEC will pay attention to firm’s cybersecurity measures to prevent sophisticated AI threats, incident response procedures, third-party oversight and additional safeguards to protect customer information from new and emerging cyber threats.
The critical first step for firms is to review existing cybersecurity efforts and update where needed to meet potential new threats. Strengthening response and oversight protocol, and ensuring that personnel, and third parties who have access to customer data are held to the same data protection standards.
Read more on Considerations for AI Procedures and Procedures here.
Compliance Program Effectiveness and M&A
The SEC’s 2027 Exam Priorities highlight firm growth as an area that will garner additional scrutiny in the coming year. M&As in the RIA industry continues to skyrocket as firms expand operationally and/or geographically.
The SEC is tasked with ensuring that expanding firms update the effectiveness of their compliance programs to adequately reflect where the business is today.
When a firm expands through acquisition, factors such as the acquired business’ policies and procedures, differences in business operations, compliance controls and new conflicts of interest must be addressed. The SEC will look at whether a firm has undertaken and documented comprehensive annual reviews, addressed any identified gaps in compliance, updated policies and procedures to meet the current needs and objectives of the business, and followed those procedures in practice.
Broker-Dealer Customer Protection Rule
The SEC’s 2027 Exam Priorities highlight recent amendments to the Customer Protection Rule (Exchange Act Rule 15c3-3), including changes to customer reserve calculations and U.S. Treasury clearing. The rule is designed to protect customer funds and securities held by broker-dealers.
For small to mid-sized broker-dealers, the requirements will depend on how the firm operates and whether it holds customer funds or securities.
Firms should review their operations to determine which requirements apply, confirm that customer assets are properly protected, and update policies and procedures where necessary. The SEC will also continue to examine whether firms have adequate financial controls and liquidity to meet their obligations.
Proxy Advisory Firms
The SEC included advisers’ reliance on proxy advisory firms as an examination focus for 2027. This primarily affects investment advisers that use third-party firms to help make shareholder voting decisions.
The SEC will focus on how advisers oversee these third-party firms, including how voting recommendations are evaluated, if and how potential conflicts of interest are identified, and if advisers reliance on these third-party recommendations align with their fiduciary duties.
Advisers should review their proxy voting procedures and oversight of these third-party providers.
Additional Areas of Focus: AML and Private Investments
The SEC will continue to examine broker-dealer AML programs, including customer due diligence, suspicious activity reporting and sanctions controls. For investment advisers, private credit and other complex or illiquid investments remain a priority, with attention to valuation, liquidity, investment risks, fees and expenses. Firms should ensure their policies, procedures and disclosures adequately address these risks.
Other areas of focus included in the 2027 SEC Exams Priorities can be reviewed at: SEC Division of Examinations, Fiscal Year 2027 Examination Priorities
The SEC’s 2027 Exam priorities should serve as guide to strengthen current compliance efforts, with additional considerations given to the newly listed priorities. Small to mid-sized firms should carefully examine all potential areas of regulatory concern, confirm which exemptions remain applicable to the firm, any conflicts of interest that should be addressed, other threats that may have evolved from firm growth, integrated technologies, or amended rules.
For assistance with your annual review and to identify and address any areas of concern, please contact us at 619.298.2880 or email [email protected].
