On October 21, 2024, the Division of SECURITIES AND Exchange Commission of the United States (“Division of exams”) announced its examination priorities in 2025 (“report”).1 Placement advisers and brokers should ensure that policies, procedures and surveillance efforts linked to these priorities meet the concerns described in the report.
The examination of exams performs inspections of the entities registered with the SEC, including investment advisers and brokers. Although the report is not exhaustive in the fields of intervention in the examination division, it highlights special risk areas. In addition, the priorities of the exam division often leads to application measures focused on these same priorities, so that the list serves as a guide for potential areas for the application.
As in previous years, the exam division has published its priorities to coincide with the start of the dry exercise in order to:
“Provide more transparency and as soon as possible to allow companies registered more opportunities to assess their compliance efforts.”2
The report covers the perennial priorities of the examination of exams alongside new areas of risk. Three notable areas of risk which are relevant for most participants in the capital markets include: (1) emerging financial technologies based on artificial intelligence (“IA”); (2) Information security and operational resilience; and (3) cryptographic active ingredients.
Emerging financial technologies:
The examination of exams aims to examine the use by service inscribers such as automated investment tools, AI and commercial algorithms. More specifically, the report stresses that as regards the AI, the Division of Examinations will assess the policies and procedures of registrations to monitor controls, prevention of fraud, anti-flow and protections against loss or abusive use of customer information. This priority occurs after a year during which the SEC continued to repeat its concerns concerning the risks linked to AI. Companies and individual actors have the obligation to ensure specific disclosure linked to AI, as described in our previous alert.
Information security and operational resilience:
In 2025, the examination division will continue to prioritize its examination of cybersecurity practices, paying particular attention to the protection of information, files and assets of customers. The examination of exams will examine the policies in place for the prevention of data loss, access controls and responses to cyber incidents. The SEC suggests that registrants should take into account third-party services and products when assessing cybersecurity risks and cyber-resilience planning for essential commercial operations. See our alert for additional suggestions.
Cryptographic assets:
Based on its priorities of 2024, the exam division will remain determined to monitor closely and, due to the driver’s examinations of registrants offering investments involving cryptographic assets. The exam division noted that it would examine whether the holder complies with appropriate standards when recommending cryptographic assets and examining and strengthening his compliance practices and risk disclosure relating to these products. We expect the crypto to remain a priority for the dry given the recent actions of the High Level Crypto crypto this year.
The examination of examinations has identified several other priorities, in particular the assessment of compliance with compliance with S-ID and SP regulations and to remain up to date with all the required policies and procedures concerning the protection of files and customer information. In addition, the examination of examinations will continue to prioritize the anti-flowage programs (“LMA”) and to assess whether the brokers and the registered investment companies respect the rules surrounding the adaptation of their commercial model, carrying out independent tests and respected the SAR deposit obligations. The exam division also noted that it could start to carry out examinations of the exchange of exchanges based on the security recorded at the end of the 2025 financial year after adopting new regulations in late 2023.
Olivia Hussey (White & Case, clerk of the law, New York) contributed to the development of this publication.
1,2025 examination priorities, US dry. & Exch. Comm’n Div. examinations (October 21, 2024), https://www.sec.gov/files/2025-exam-pritures.pdf.
2,2025 examination priorities, supra note 1.
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