www.thedailyupside.com SEC Examines Conflicts and Complex Products for 2027 Compliance
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- •SEC's 2027 priorities focus on complex financial products and proxy voting.
- •Emerging technologies will be used to enhance compliance reviews.
- •Advisors must ensure accurate filings related to activist engagement practices.
The SEC has published its examination priorities for fiscal year 2027, focusing on compliance reviews for over 34,000 registrants, including advisors and broker-dealers. Key areas of concern include complex products such as exchange-traded funds based on less liquid assets, single-stock ETFs, and option-based funds. New priorities emphasize proxy voting and engagement, particularly the use of proxy advisory firms. The SEC is also concerned about economic conflicts of interest and the valuation of less liquid investments like private credit. The agency plans to leverage emerging technologies, referred to as 'super intelligence', to enhance compliance and fraud prevention efforts. Advisors are advised to prepare for examinations that will assess their use of these technologies.
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