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On November 17, 2025, the SEC’s Division of Examinations released its examination priorities for fiscal year 2026, identifying areas the agency alleges present heightened compliance and investor protection risks under the federal securities laws. The priorities apply to investment advisers, investment companies, broker-dealers, municipal advisors, transfer agents, self-regulatory organizations, clearing agencies, and other registrants overseen by the Division.
The Division stated that the 2026 priorities reflect evolving market conditions, the introduction of new regulatory requirements, and increased reliance on automated systems and emerging technology. The publication reiterates the agency’s four pillars to promote compliance, prevent fraud, monitor risk, and inform policy, and signals a focus on both foundational obligations and operational risks.
The Division identified several themes that firms should review as they prepare for 2026 examinations:
- Compliance with new and amended rules. Examiners will review implementation of the 2024 amendments to Regulation S P, including incident response programs, customer notification procedures, and enhanced safeguards for customer information.
- Information security and operational resiliency. Reviews will assess cybersecurity governance, identity theft prevention controls, vendor oversight, and preparedness for sophisticated cyber threats, including AI-driven intrusions.
- Fiduciary duties, sales practices, and core compliance program oversight. The Division will evaluate advisers’ conflict management, best execution, disclosures, and annual reviews, as well as broker-dealer financial responsibility processes, Regulation Best Interest obligations, and consistency of recommendations with investor profiles.
- Emerging financial technology and AI. Examiners will focus on automated investment tools, algorithmic models, and AI-based systems, including whether representations are accurate and whether technology driven recommendations align with regulatory expectations.
- Security based swap and market infrastructure oversight. The Division will begin examinations of registered security-based swap execution facilities and continue reviewing clearing agency risk management, governance, and operational controls.
The Division noted that the priorities are not exhaustive and may shift as new products or risks emerge.
Putting It Into Practice: Federal and state regulators have shown a new emphasis on emerging technologies, cybersecurity readiness, and updated privacy obligations (previously discussed here and here). Firms should also take this opportunity to revisit broader compliance planning for the year ahead and ensure internal processes are positioned to respond effectively to supervisory attention.
