Summary of the SEC's 2025 Exam Priorities

Key areas of focus for 2025 include:

1. Fiduciary Duty & Standards of Conduct

The SEC continues to emphasize the importance of fiduciary responsibility, particularly for investment advisers. Firms will be scrutinized to determine whether their advice is in the best interest of clients, with a special focus on high-cost products, complex instruments, and assets that may be impacted by rising interest rates or changing market conditions. Conflicts of interest and transparency in disclosures will be critical parts of these examinations.

2. Cybersecurity and Data Protection

In light of increasing digital threats, the SEC is prioritizing the protection of sensitive investor data. Firms will be assessed on their cybersecurity practices, the strength of their data protection controls, and their preparedness against cyber-attacks, which pose a growing risk in the financial services sector.

3. Emerging Technologies and Artificial Intelligence

The integration of artificial intelligence (AI) and other emerging technologies into financial services is rapidly growing. The SEC will evaluate how firms manage the risks associated with these technologies, ensuring compliance with regulations while leveraging advanced tools.

4. Compliance with New Rules

Newly implemented SEC rules, such as Regulation S-P (Privacy of Consumer Financial Information) updates, will be a primary focus. The SEC encourages firms to review their compliance programs to ensure alignment with these new standards and avoid potential penalties.

5. Market Infrastructure and Broker-Dealer Oversight

The SEC will continue to oversee broker-dealers and market infrastructure providers. This includes examining their role in safeguarding market integrity, particularly in areas such as best execution and the handling of retail investors.

The 2025 Examination Priorities aim to provide transparency, promote compliance, and protect investors. Firms are encouraged to review these priorities and strengthen compliance programs to address the highlighted risks. The full report is available on the SEC website here.