The US Securities and Exchange Commission’s (SEC) 2027 examination priorities give compliance teams more detail on how examiners will assess economic conflicts, private-asset valuations and technology oversight. Published on 23 October, the Division of Examinations (EXAMS) report also identifies tokenisation and Treasury clearing among the developments shaping examinations of market infrastructure.
Many concerns carry over from 2026, including private credit, artificial intelligence (AI), extended-hours trading and adapting compliance programmes to business changes.
Economic Conflicts
Fee rebates, cash management, deposits, withdrawals and quid pro quo arrangements receive explicit attention under investment advisers’ fiduciary duties. Examiners will assess whether financial conflicts compromise the impartiality of advice, building on the June 2026 risk alert on economic conflicts.
Lori Weston, Head of Compliance at STP Investment Services, points to compensation that can escape scrutiny:
“Conflicts of interest are at the heart of fiduciary duty, and the SEC’s focus on economic conflicts follows where some of the deepest conflicts exist: indirect and often under-disclosed compensation. Sweep programs and cash allocations are easily overlooked because they tend to be treated as operational, but they can present economic conflicts that warrant detailed review.”
The priorities also identify reliance on proxy advisory firms. Reviews will examine how advisers evaluate recommendations, assess their basis and identify conflicts. Outsourcing the analysis does not relieve advisers from their obligations and examiners will also focus on the adequacy of controls where third parties are given access to client data.Private Asset Controls
Private-fund examinations will cover the use of debt and fund-level lines of credit, affiliated service providers and investment allocations. Fees and expenses receive attention at both fund and investment level.
The report also identifies business development companies (BDCs) and special purpose vehicles (SPVs) in its discussion of complex and illiquid investments. Robert Baker, Managing Director and Co-Lead of Mock Examination at ACA Group, writes:
“While valuation continues to be identified as part of EXAMS’ evaluation of advisers’ compliance programs, the 2027 priorities also expressly reference the reasonableness of advisers’ valuation processes and methodologies in the context of fiduciary duty. In addition, the examples of complex or illiquid investments receiving heightened attention now include loans provided by private funds or BDCs and investments in private companies through SPVs, areas in which valuation issues may be particularly significant.”
Technology Oversight
The report uses the term “super intelligence” (SI) for technologies deployed across research, coding, client communications and compliance. Oversight of these applications continues the 2026 focus on AI supervision in trading, back-office operations and financial-crime controls.
For 2027, the Division identifies SI-generated phishing and deepfake voice and video as threats firms should assess. It will also examine monitoring of SI applications. Its broader reviews of automated tools and emerging technologies will assess whether operations and controls match investor disclosures.STP’s Weston warns that oversight must extend to SI embedded in third-party software and employees’ personal accounts used for business. These uses raise recordkeeping and customer-information concerns.
Regulation S-P
The 2026 priorities covered preparation for amended Regulation S-P and examination of compliance after the applicable deadlines. ACA’s Baker describes the 2027 emphasis as a shift to implementation. Examiners will assess safeguards protecting customer information, including procedures for responding to unauthorised access or use, notifying customers and overseeing service providers. Reviews will also address operational and technology risks affecting that protection.
Market Infrastructure
Broker-dealer examinations will address Customer Protection Rule amendments relating to daily customer reserve computations and Treasury clearing. Extended-hours reviews will examine operational challenges, liquidity-provider availability and market and credit risk controls.
Tokenisation appears among clearing-agency risks. For entities subject to ‘Regulation Systems Compliance and Integrity (SCI)’, examinations will address emerging trends including tokenisation, extended trading hours and quantum computing. Reviews will also cover cloud and other third-party dependencies, including how entities identify vendor systems that qualify as SCI systems or indirect SCI systems.
Examinations of covered clearing agencies will assess corrective action on previous findings. The Division will also prioritise compliance with new rules covering Treasury clearing, governance, recovery and orderly wind-down plans, and straight-through processing by central matching service providers.
Preparing for Examination
The Division’s new examination handbook explains the examination process and opportunities to engage with staff. EXAMS plans to use SI to support examinations and risk assessment while retaining examiner judgement. Its modernisation programme aims to reduce manual and duplicated work and improve analysis of complex datasets.
For advisers changing their business, STP’s Weston recommends, “The Division’s focus on advisers that have added new client types or services shows these areas of change are not a fleeting concern. Firms in these categories should carefully evaluate how the change affects their compliance program, risk assessment, and conflicts, document that analysis, and reflect it in their next annual compliance review.”
The annual compliance review provides an opportunity to document those changes, assess the controls and track corrective action. Firms should be prepared to explain their decisions and show how they addressed weaknesses identified through internal testing, incidents or previous regulatory examinations.
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