The SEC Names Private Funds and Private Credit in Its Fiscal 2027 Exam Priorities Published 23 October: What Fund Managers Should Check

The SEC's Division of Examinations published its fiscal year 2027 examination priorities on 23 October 2026 in press release 2026-109, and "private funds, private credit, and other complex investment strategies" is one of the named focus areas. The release says the priorities cover more than 34,000 registrants and are not exhaustive, so the division can add topics during the year. This is a note on what the priorities say and what a fund manager could check in response, based on the SEC's announcement and reporting on the full document. It is not legal advice, and we could not open the full priorities document ourselves, so read it before you act on any detail below.

What the SEC announced on 23 October 2026

The release lists eight priority areas: investment advisers' fiduciary duties, conflicts of interest, recommendations and compliance programmes; retail investor protection, especially for complex, higher-risk and illiquid products; private funds, private credit and other complex strategies; broker-dealer financial responsibility, trading and anti-money laundering; operational resiliency, cybersecurity and protection of customer information; emerging technologies; market infrastructure risks including Treasury clearing and tokenisation; and oversight of self-regulatory organisations and other critical market participants. The release gives no further detail on the private funds item. Reporting on the full document says the division's private fund work will look at disclosures about investment risks and allocations, borrowing and fund-level credit lines, affiliated service providers, the accuracy of fees and expenses at both fund and investment level, and valuation methods and whether advisers did reasonable due diligence on them.

How it fits earlier SEC activity

This is not new ground. Reporting on the document notes that the division published a risk alert on 9 June on conflicts of interest that advisers had failed to disclose, or disclosed incompletely or misleadingly. The priorities were also published about three weeks earlier than last year's, which had been delayed by a government shutdown. We covered the division's examination handbook on 6 October in our note on what private fund managers should do before an examination notice arrives, and the custody rule rewrite in our note on the proposal to change the adviser custody rule. The 23 October priorities add a view of where examiners expect to spend time in the coming year.

Where the private fund items touch your documents

Our reading, not SEC guidance: each item maps to a document an examiner can request. Fees and expenses map to your partnership agreement, your expense allocation policy and how you calculate the management fee, including offsets and what is charged at the portfolio company level. Borrowing and fund-level credit maps to how you describe and use a subscription line in investor materials. Affiliated service providers map to your conflicts policy and the disclosure given to investors. Valuation maps to your written valuation procedures and the file showing the due diligence done on any third-party inputs. For private credit and other illiquid products, reporting on the document says examiners will test whether recommendations consider liquidity, volatility, time horizon and costs, including exit costs.

Other items that may reach fund managers

Cybersecurity is a named priority. Reporting says examiners will review governance, data loss prevention, access controls and incident response, and the plan expects firms to be ready for phishing and deepfake scams that use advanced technology. It also describes the amended Regulation S-P, covering incident response, breach notification and vendor oversight, as a key test; smaller advisers under $1.5 billion of assets had until 3 June to comply. The release does not mention the marketing rule, so do not assume it is out of scope: our marketing rule glossary entry sets out the basics. Newly registered advisers, and firms integrating into larger groups, are described as higher-risk profiles, especially those that changed business model, added client types or asset classes, or grew through acquisitions, which matters if you registered recently or have recently taken on a new fund type.

What to check this quarter

This list is our suggestion. Compare the fees and expenses charged to each fund in the last year with what your partnership agreement and investor materials say. Check that your valuation procedures match how you value in practice, and that the file shows who reviewed third-party inputs. Re-read how credit lines are described to investors. Confirm that every affiliate that charges a fund is disclosed. Test your incident response plan against the amended Regulation S-P. Write down what you checked and what you changed, with dates, because a record of your own review is easier to show an examiner than a recollection of it. Finally, keep a due diligence pack current, because a clean one makes both examiner and investor requests faster.

What to watch next

Watch for the full priorities document and any commentary from the division on private fund topics, and for further risk alerts. FundLinx members can see which LPs are active in your strategy.

This is general information, not legal advice. Speak to your compliance counsel about your own position.

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