SEC announces fiscal year 2025 examination priorities: Key focus areas and updates 

The U.S. Securities and Exchange Commission (SEC) has released its fiscal year (FY) 2025 examination priorities, outlining key areas of focus for regulatory oversight. This year’s report highlights investment adviser compliance, broker-dealer responsibilities, self-regulatory organization enforcement and emerging financial risks. All to emphasize the need for firms to strengthen their risk management, transparency and investor protections.  

Investment advisers: The SEC will continue to focus on investment advisers’ adherence to fiduciary duties, in particular regarding recommendations for high-cost, illiquid or interest rate-sensitive assets. Scrutiny will also extend to compliance programs, ensuring that firms maintain effective policies, disclosures and supervision, especially as they integrate AI-driven advisory tools and alternative revenue models. Private fund advisers will face increased oversight related to fee allocations, valuation practices and conflict disclosures, particularly for funds with high leverage, market volatility exposure, or significant investor withdrawals. The SEC will also prioritize examinations of newly registered advisers and firms that have not undergone recent inspections, ensuring they meet regulatory expectations. 

Broker-dealers: Broker-dealers will be examined for compliance with regulation best interest (Reg BI), focusing on product recommendations, conflict mitigation and investor suitability, particularly in relation to complex and high-risk financial products. Firms must also ensure accurate and transparent Form CRS disclosures detailing their services, fees and conflicts of interest. Trading-related practices will be another priority, with examinations assessing market risk management, execution quality and pre- initial public offering (IPO) trading activities. The SEC will also review how firms handle retail investor orders, manage liquidity risks and oversee trading-related services, particularly in fast-evolving digital trading environments. 

Self-regulatory organizations and clearing agencies: The SEC will conduct risk-based reviews of national securities exchanges, Financial Industry Regulatory Authority (FINRA) and the Municipal Securities Rulemaking Board (MSRB) to ensure they are fulfilling their regulatory obligations. These examinations will assess how these entities enforce compliance among their members, manage market integrity and implement investor protection measures. Clearing agencies will also be examined for liquidity risk, member default protocols and operational resilience, ensuring they adhere to federal securities laws and newly adopted regulatory standards.