The Securities and Exchange Commission released Monday its exam priorities for 2025 — with Regulation Best Interest, Form CRS, artificial intelligence and registered investment advisors' fiduciary duty topping the list.
In addition to conducting exams in core areas "such as disclosures and governance practices," the agency said it will also examine for compliance "with new rules, the use of emerging technologies, and the soundness of controls intended to protect investor information, records, and assets" in fiscal 2025.
"Our 2025 examination priorities identify the key areas of potentially increased risks and related harm for investors," said Keith Cassidy, acting director of the Division of Examinations, in a statement. "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."
SEC exams will include a new focus on "assets sensitive to higher interest rates or changing market conditions, including commercial real estate."
"While last year's priorities included a focus on products purporting to address rising interest rates, advisers with commercial real estate strategies should take note as a focus on commercial real estate appears more than once in the priorities," said Sara Crovitz, partner at Stradley Ronon in Washington.
Reviews of advisors' compliance programs may also focus on "alternative sources of revenue or benefits advisers receive, such as selling non-securities based products" to clients.
"In these instances, there may be questions about whether services being provided actually are advisory services and whether those activities are subject to the [Investment Advisers Act] IAA or to Exams' authority," Crovitz added.
Some of the agency's top exam priorities for 2025 are:
