WASHINGTON, Oct 23 (Reuters) - The US Securities and Exchange Commission said Friday that the use of artificial intelligence, private assets and tokenized securities would be among key areas of focus for the agency's examination of Wall Street firms in the current fiscal year.
The announcement comes as the Trump administration has moved to expand access to private assets for retirement savers and retail investors, potentially offering higher returns but also exposing everyday Americans to more risk.
The SEC last month also unveiled a five-year exemption to allow companies to offer blockchain-based or tokenized stocks.
The SEC's examinations division inspects SEC-regulated firms like investment advisers, broker-dealers, stock exchanges and others, and can refer findings of wrongdoing to the enforcement division. The agency last year de-emphasized scrutiny of the cryptocurrency sector.
In a statement, the agency said that in the federal government's 2027 fiscal year, which began October 1, priority areas for examiners would include private funds and private credit.
Critics say ordinary investors may not see the expected higher returns on such assets and also may not understand the fees involved, or that the assets are often hard to price and cannot be immediately redeemed for cash.
The SEC also plans to focus on the use of artificial intelligence and other technology "that may affect market operations, compliance, fraud prevention and investor protection," as well as risks associated with changes to market structure including tokenization of securities, the statement said.
Reporting by Douglas Gillison in Washington; editing by David Gaffen
