SEC FY2027 Exam Priorities for Broker-Dealers

Updated October 2026 for the fiscal 2027 priorities. First published June 2025.

The SEC's Division of Examinations published its fiscal 2027 examination priorities on October 23, 2026, for the fiscal year that began October 1. The broker-dealer section has five parts: financial responsibility, trading practices, retail sales practice, anti-money laundering, and supervision. The last two are new to the broker-dealer section this year. Four risk areas that cut across registrant types follow: cybersecurity, new financial technology, Regulations S-ID and S-P, and Regulation SCI.

The first version of this post covered the fiscal 2025 list. It also named ESG investing as a 2025 priority, which was wrong: the fiscal 2025 document doesn't mention ESG. This version covers what the fiscal 2027 document says for broker-dealers, what dropped off, and how exams are run under the current Commission.

Financial Responsibility

The Division will "continue to focus on compliance with the Net Capital Rule, the Customer Protection Rule, and related internal processes, procedures, and controls." Two recent changes get named:

Daily customer reserve computations. The SEC adopted the amendments to Rule 15c3-3 on December 20, 2024, and extended the compliance date to June 30, 2026. Expect examiners to ask for the daily computations themselves, not only the procedure.
Treasury clearing, including the reserve formula debit for margin posted at a Treasury clearing agency. Cash clearing starts December 31, 2026. Our Treasury clearing update has the dates.

Examiners will also look at whether firms have enough liquidity to manage stress events and stay in compliance, and they "will assess prime brokerage activities considering concentration, liquidity, and counterparty credit risks."

Trading Practices

Extended hours lead the trading section. "With more trading venues offering extended trading hours," the Division will review operational challenges, whether liquidity providers are "willing, ready, and able to provide liquidity on and off exchange," and market and credit risk procedures. Overnight exchange sessions are set to start December 6, 2026; our post on 24-hour trading covers what changes.

The section also covers order routing and best execution, the pricing and valuation of illiquid instruments such as private credit and private equity, and priority of orders in municipal securities.

Retail Sales Practice and Regulation Best Interest

Reg BI exams will look at what firms recommend (including account and rollover recommendations), how they identify and mitigate conflicts, how they review reasonably available alternatives, and how they meet the Disclosure and Care Obligations. The products the Division calls out include variable and registered index-linked annuities, ETFs that hold private equity or private credit, low-priced and small-cap securities, zero-days-to-expiration options, single-stock ETFs, private placements, and structured products. For Form CRS, examiners will read how each firm describes its services, its fees and costs, and its conflicts of interest.

One new item: examiners will review how broker-dealers supervise payments to unregistered persons "who may be acting as finders," and transaction-based compensation paid to personal-service entities that aren't registered as broker-dealers.

Anti-Money Laundering

AML moved into the broker-dealer section with five review points: whether the program fits the business model, including the risks of "omnibus accounts maintained for foreign financial institutions"; independent testing; the risks of trading in foreign-based companies, including "pump-and-dump" and "ramp-and-dump" schemes, coordinated with the SEC's Cross-Border Task Force; ongoing customer due diligence; and Suspicious Activity Report filing.

Supervision

Supervision is a new heading. The Division will evaluate whether firms "maintain supervisory systems, written policies and procedures, and internal controls reasonably designed to achieve compliance," including for new business activities and products, and whether "appropriate and qualified individuals have been designated with the authority to carry out their supervisory responsibilities." That second clause is the one to test against your own organization chart.

Cybersecurity, Vendors, and Regulation S-P

The cybersecurity section covers governance, data loss prevention, access controls, account management, and incident response, including ransomware. The Division will also "assess risks associated with registrants' increased use of third-party service providers and shared technologies."

The amended Regulation S-P is now in force for every broker-dealer. Larger entities had to comply by December 3, 2025, and smaller ones by June 3, 2026, according to the SEC's compliance guide. Examiners will evaluate the incident response program, customer notification procedures, and oversight of service providers. The rule requires firms to notify affected customers no later than 30 days after becoming aware of an incident, with limited exceptions. It also requires procedures that make service providers tell the firm within 72 hours when a breach hits a customer information system they maintain.

In practice, the evidence is a list of the vendors that hold customer information, the notification terms in each contract, and a record that someone reviewed each vendor. If Loffa is on your list, ask us for our SOC 1 and SOC 2 Type II audit reports.

"Super Intelligence"

The emerging technology section uses the term "super intelligence (SI)" where the fiscal 2026 document said artificial intelligence. Examiners will look at how firms prepare for SI-driven attacks, such as "SI-generated phishing messaging and synthetic or deepfake voice and video used for social engineering," and at policies for monitoring SI used in fraud detection, back-office operations, AML and Reg BI compliance, and trading.

What Dropped Off

Crypto assets. The fiscal 2025 list had a standalone crypto section. The fiscal 2026 and fiscal 2027 lists don't mention crypto; the fiscal 2027 document mentions tokenization only under clearing agencies and Regulation SCI.
T+1. The fiscal 2025 list reviewed compliance with Rules 15c6-1 and 15c6-2. That item dropped in fiscal 2026.
From fiscal 2026: cash sweep programs, Regulation SHO bona fide market making, Rule 605 disclosures, the timeliness of financial notifications, and the sentence on vendors whose services feed financial reporting records.

An item leaving the list doesn't mean the rule stopped applying. It means the Division isn't telling you in advance that it will be a focus.

How Exams Run Now

When the fiscal 2026 list came out in November 2025, Chairman Paul Atkins said exams "should not be a 'gotcha' exercise." On October 1, 2026, the Division published a new exam handbook describing each stage of an exam and how to raise questions. It's also working with less staff. Director Keith Cassidy said in a September 2026 speech that the Division has "slightly less than 1,000 professionals," against more than 1,100 staff cited in the fiscal 2025 priorities.

FINRA's annual report overlaps heavily. Its 2026 Annual Regulatory Oversight Report, published December 9, 2025, covers third-party risk, Regulation S-P, net capital, liquidity, customer asset protection, and extended hours trading. Unlike the SEC list, it keeps a section on crypto and a section on books and records under SEC Rules 17a-3 and 17a-4.

This post is for informational purposes only and does not constitute legal advice. For guidance on specific regulatory obligations, consult your counsel or compliance advisor.