On October 21, 2024, the U.S. Securities and Exchange Commission’s (“SEC”) Division of Examinations (“EXAMS”) announced its 2025 Examination Priorities (the “2025 Priorities”), highlighting areas that it expects to target during examinations in 2025. The 2025 Priorities reinforce many of the same areas of focus as the 2024 priorities, including investment advisers to private funds, conflicts of interest disclosures, Regulation Best Interest (“Reg BI”), cybersecurity, and crypto assets. The 2025 Priorities also signal heightened attention to emerging areas of concern, including the use of artificial intelligence (“AI”) and client exposure to commercial real estate.
Registered investment advisers (“RIAs”), registered investment companies (“RICs”), and broker-dealers should carefully review the 2025 Priorities to ensure their compliance systems and policies are up to date, monitored, and enforced. Indeed, given the SEC’s history of pursuing enforcement actions in areas highlighted in prior years as Examination Priorities, appropriate attention to the 2025 Priorities today could save regulated entities considerable resources down the road.[1]
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Ed. Note: “The 2025 Priorities note that EXAMS will continue to focus on:
Municipal advisors, including whether they have met their fiduciary duty to municipal entity clients, as well as whether municipal advisors have complied with MSRB Rule G-42, which establishes the core standards of conduct and duties applicable to non-solicitor municipal advisors.”
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Morrison & Foerster LLP – Kelley A. Howes, Sarah Y. Hanni, Derek N. Steingarten, Michael D. Birnbaum, Haimavathi V. Marlier, Val Dahiya and Aaron J. Russ
November 1 2024