SEC Examination Priorities Municipal Advisors and Broker-Dealers- 2025
The Securities and Exchange Commission’s (SEC’s) Division of Examinations released its 2025 examination priorities. The SEC publishes its examination priorities annually to inform registrants of potential risks in the U.S. capital markets and to make them aware of the examination topics that the Division plans to focus on in the new fiscal year.
This year’s examinations will prioritize perennial and emerging risk areas, such as fiduciary duty, standards of conduct, cybersecurity, and artificial intelligence.
Here are a few priorities regarding broker-dealers (BDs)
Regulation Best Interest and recommendations to retail customers;
Form CRS;
Broker-Dealer Financial Responsibility Rules;
Broker-Dealer Trading-Related Practices and Services;
Recommendations related to complex, illiquid, or present higher risks to investors (e.g., highly leveraged or inversed products, crypto assets, structured products, alternative investments, not registered with the SEC, complex fee structures or return calculations, based on exotic benchmarks, or growth areas for retail investments);
And more…
Here are a few priorities regarding Municipal Advisors (MAs)
“The Division will continue to examine whether municipal advisors have met their fiduciary duty to municipal entity clients when engaging in municipal advisory activities, such as providing advice or recommendations regarding the pricing or method of sale with respect to the issuance of municipal securities. The Division will also continue to examine 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, including requirements to disclose conflicts of interest and to document municipal advisory relationships. Finally, the Division will continue to assess whether municipal advisors have made required filings with the Commission and met their professional qualification, recordkeeping, and supervision requirements.”
You can read more here: https://www.sec.gov/newsroom/press-releases/2024-172
