On Oct. 21, 2024 , the US Securities Exchange Commission (“SEC”) published a press release announcing their 2025 Examination Priorities. Many of the focus areas come as no surprise, as the SEC has diligently alerted industry and investors alike to what their areas of concern have been throughout the year. There are, however, a few areas that registrants may find require an extra review or a deeper dive.
Acting Director of the Division of Examinations Keith Cassidy said, “Our 2025 examination priorities identify the key areas of potentially increased risks and related harm for investors. We hope that registrants will evaluate their compliance programs in the areas we identified and make the changes necessary to protect investors and maintain fair and orderly capital markets.”
The SEC’s year-round Risk Alerts and recently published EXAM priorities are to ensure that registrants remain diligent in their obligations to their investors and to maintain transparency and compliance.
This year’s priorities emphasize the importance of continuous diligence in disclosures and governance, and the implementation of internal protocols to address new and existing risks, especially in the areas of emerging technologies such as Artificial Intelligence (“AI”) and cybersecurity.
SEC Priorities for upcoming EXAMS include, among other things:
•Fiduciary Standards of Conduct including the duty of care and duty of loyalty;
•Effectiveness of Advisers’ Compliance Programs, including adoption and implementation of adequate Policies and Procedures;
•Examinations of Advisers to Private Funds, including Policies and Procedures and Disclosures of Conflicts of Interest;
•Broker-Dealers’ Regulation Best Interest (“Reg B-I”), including disclosures regarding conflicts of interest and consideration for clients’ investment profiles;
•Cybersecurity protections, and how registrants mitigate, address, and manage such risks; and
•Emerging technologies, and how registrants adopt, implement, and manage evolving technologies and mitigate risk.
The SEC has introduced and amended numerous rules over the last year, many of which will be reviewed during upcoming examinations. We highly encourage registrants to review the 2025 SEC Examination Priorities thoroughly and engage in a comprehensive review of their firm’s compliance program to map which areas should be addressed in the months ahead.
Jacko Law Group, PC works with SEC and FINRA registrants to review and address regulatory compliance programs with services such as Compliance Review and Assessments and Preparing for Examinations.
For more information on how we can help, please call 619.298.2880 or email [email protected].
