SEC Division of Examinations Releases 2026 Priorities

This year’s examinations will prioritize perennial core areas such as fiduciary obligations, information security, AML monitoring, and newly registered and never-examined firms. Additionally, the SEC has signaled more focus on retail advisers and on topics such as complex financial instruments, compliance with the new Reg-SP amendments, cybersecurity, and the use of AI and algorithms. Below is a high-level overview of what is new, what are top priorities, and how firms can prepare for the new year. 

Retail Investors: 

Advisers, investment companies, wealth managers, and broker-dealers should expect deeper examination reviews into how their products, advice, and practices impact retail clients. 

Complex and Higher-Risk Products: 

High-cost products and complex structures such as illiquid asset ETFs or inverse ETFs will see heightened scrutiny given their liquidity, leverage, and volatility risks. 

Investment Process and Risk Management:  

Examiners will assess how advisers evaluate, monitor, and control investment risk – particularly volatility and liquidity risk – within their investment process, including governance, risk methodologies, and ongoing oversight. 

Artificial Intelligence: 

With AI tools becoming more common in investment and operational workflows, the SEC will review the accuracy of public AI-related statements and the strength of firms’ governance, controls, and human oversight. Firms should be prepared to demonstrate a disciplined framework for using AI, including oversight, monitoring, and staff training. 

Investment Advisers and Investment Companies  

The SEC prioritizes examinations of registered investment advisers and investment companies, and both public and private funds. 

• Fiduciary Obligations: The SEC reminds investment advisers of their fiduciary duty, care obligations, and the importance of whether advice is in the best interest of clients.
• Compliance Program Governance: Another focus area is on the effectiveness of advisers’ compliance programs, including reviewing the adequacy of written policies and procedures and the role of CCOs. The SEC is expected to focus on core areas including marketing, valuation, trading, portfolio management, disclosures, and custody.
• Registered Investment Companies (RICs): Examinations for RICs, including mutual funds and ETFs, will include overall governance and compliance programs. Operationally, the SEC will focus on fund fees and expenses and portfolio management practices and disclosures. The SEC will monitor developing areas of interest for RICs participating in mergers or similar transactions, using complex or illiquid products, and implementing novel strategies or investments.  

Broker-Dealers 

• Financial Responsibility Rules: The SEC will assess broker-dealers’ compliance with core financial responsibility rules and the strength of their operational resilience. Exams will emphasize liquidity and risk management under stress, as well as risks arising from cash sweep programs, prime brokerage activities, and key third-party providers.
• Trading-Related Practices and Services: The SEC will prioritize broker-dealer equity and fixed-income trading practices, focusing on order routing, execution quality, pricing of less liquid instruments, and related disclosures, as well as compliance with Regulation SHO and the controls, transparency, and confidentiality of alternative trading systems.
• Retail Sales Practices (Compliance with Regulation Best Interest): The SEC will intensify reviews of broker-dealer sales practices, with a strong focus on Regulation Best Interest. Exams will evaluate how firms recommend products and account types, manage conflicts of interest, consider reasonably available alternatives, and satisfy the Care Obligation. Reviews will emphasize complex and illiquid products, and recommendations to older investors and those saving for retirement or college. The SEC will also scrutinize dual registrants’ conflict management and account selection, branch supervision, and the clarity and accuracy of Form CRS disclosures on services, fees, conflicts, and disciplinary history. 

SROs, Clearing Agencies, and Other Market Participants 

The SEC will continue risk-based oversight of exchanges, SROs, clearing agencies, municipal advisors, transfer agents, and swap market participants to strengthen market integrity and investor protection. Examinations will focus on conduct, governance, risk management, operational and financial resilience, use of emerging technologies, and timely remediation of weaknesses. 

Risk Areas Impacting Market Participants 

• Cybersecurity: Examiners will assess whether firms have robust governance, controls, and incident response capabilities to protect investor data and prepare for emerging threats such as AI-enabled attacks. Firms should be prepared to demonstrate a comprehensive, enterprise-level approach to information security and business continuity.
• Regulation S-ID and Regulation S-P: The SEC will review firms’ compliance with Regulations S-ID and S-P, focusing on governance, internal controls, and oversight of third-party vendors. Firms should be prepared to have effective programs to prevent identity theft and protect customer information, including incident response, and be ready to demonstrate that these protections are embedded in policies, procedures, and training across the organization.
• Emerging Technology: The SEC will continue to scrutinize firms’ use of automated investment tools, AI, trading algorithms, and other emerging technologies, focusing on investor risks. Examiners will assess the accuracy of related disclosures, consistency between the technology’s advice and client profiles, and the adequacy of oversight and controls. Firms should be prepared to demonstrate a clear governance framework around AI and automation across investment, operational, and compliance uses.
• Regulation SCI: The SEC will prioritize how firms manage technology and operational risk around their critical systems. Reviews will focus on the adequacy and effectiveness of incident response frameworks and on how firms oversee third-party vendors that support or connect to SCI systems.
• AML: The SEC will continue to scrutinize firms’ AML and sanctions compliance frameworks. Examiners will assess whether broker dealers, advisers, and certain RICs have risk-based AML programs and intermediary oversight that are aligned with their business models and regulatory expectations. 

Sia supports firms preparing for SEC examinations with a comprehensive suite of regulatory, operational, and AI-enabled solutions. Our team of former regulators and industry experts assists across the full compliance life cycle:   

Exam Support: 

• Exam readiness and mock exams
• Documentation and evidence management
• Regulator engagement and response support
• Remediation planning and implementation  

Compliance Advisory: 

• Annual program review and CCO reporting
• Policies and procedures development
• Compliance risk assessments and control frameworks
• Monitoring and testing  

Data & AI Risk Management:  

• Data and AI strategy and governance
• Data privacy frameworks
• Deployment of AI-enabled compliance accelerators, including RegMatcher, Sia’s flagship tool for automated compliance processes