It’s that time again for investment advisers, broker-dealers, fund managers and other financial professionals to prepare for the U.S. Securities and Exchange Commission’s (SEC) continued focus on certain topics in examinations during 2026. On November 17, 2025, the SEC’s Division of Examinations Division released its 2026 Examination Priorities. While the SEC specifically identifies certain practices, products and services that the SEC believes present heightened risks to investors or market integrity, it is not an exhaustive list of potential examination topics. Instead, the 2026 Priorities reflect areas that the Division anticipates will be of significant importance.

Four topics applying to a wide range of companies and financial market participants are highlighted and include: (a) information security and operational resiliency, including cybersecurity, data privacy and identity theft programs under Regulation S-P and S-ID; (b) emerging financial technology, including artificial intelligence (AI), automated investment tools, and alternative data; (c) compliance with Regulation Systems Compliance and Integrity (Regulation SCI); and (d) anti-money laundering (AML) obligations. The Division continues to stress the strength of firms’ overall compliance programs. Further, crypto-asset securities and other digital-asset activities remain on the Division’s radar across several of these themes.

As in previous years, the SEC emphasizes examinations of newly registered firms and those that have not been examined for several years. The agency continues to highlight risk to retail investors. Firms should ensure their programs reflect recent regulatory developments, particularly the 2024 amendments to Regulation S-P and ongoing expectations under Regulation S-ID’s identity-theft red-flags rules. Larger covered institutions generally must comply with the Regulation S-P amendments by December 3, 2025, and smaller ones by June 3, 2026.

Investment Advisers

The Division continues to place significant emphasis on advisers’ fiduciary duties of care and loyalty. In 2026, the Division will continue to evaluate whether investment advice, related disclosures, and associated practices are consistent with those obligations. Areas of focus include:

• Alternative investments (including private credit, and private funds with extended lock-ups), complex or leveraged and inverse ETFs, and other high-cost or complex instruments;
• Third-party access to client accounts and data, and related security controls to protect client assets and information; and
• Advisers undergoing mergers, acquisitions or other business-model changes that may introduce new compliance and operational risks.

The Division will also continue its focus on protecting older investors and those saving for retirement, dual-registrants and conflicts of interest. Examinations will assess advisers’ compliance programs and their annual reviews of under Rule 206(4)-7, including whether policies and procedures are properly implemented, enforced, and tailored to each adviser’s business model, paying particular attention again to conflicts of interest relating to compensation and account selection, accuracy and timeliness of regulatory filings and disclosures, and the effectiveness of annual review and remediation process. The Division may also focus on advisers with activist engagement practices and related reporting on Schedules 13D and 13G and Forms 3, 4, 5, 13F, and N-PX.

As in past years, the Division will prioritize never-examined and newly registered advisers, aiming to evaluate foundational compliance practices early in a firm’s existence.

Investment Companies

The Division will continue to prioritize examinations of registered investment companies (RICs), including mutual funds and exchange-traded funds (ETFs), given their importance to retail investors, particularly those saving for retirement. Examinations will generally include a review of the fund’s compliance program, disclosures, filings, and governance practices focusing primarily on fees and expenses (including any associated waivers or reimbursements), portfolio management practices and disclosures, and compliance with the amended Investment Company Names Rule following the applicable compliance dates.

The SEC will also monitor certain developing areas within the RIC space, including those involved in mergers or similar transactions, those with complex investment strategies or holdings, particularly if illiquid or with a complicated valuation. They will be interested in funds with novel investment strategies or leverage vulnerabilities and funds with significant holdings of less liquid or illiquid investments, which may raise valuation and conflict-of-interest concerns. Never-before-examined and newly registered funds will be prioritized.

Broker-Dealers

In 2026, the Division will continue examinations focused on financial responsibility, trading practices, and retail sales compliance, including Regulation Best Interest (Reg BI) and the customer relationship summary (Form CRS).

Financial Responsibility

Examinations will assess compliance with the Net Capital Rule and Customer Protection Rule and related internal processes and controls:

• Liquidity, credit and market risk management;
• Cash sweep programs and prime brokerage activities, including concentration, liquidity, and counterparty risk;
• Operational resiliency and third-party vendor supervision where services contribute to books and records used to prepare financial reporting information and change-management controls for broker-dealers; and
• Timeliness and accuracy of required financial notifications and other regulatory filings.

Trading Practices

Broker-dealer trading activity will remain a core area of oversight. The Division will review:

• Extended-hours and municipal securities trades, including priority-of-order-handling, the rates reset process on variable rate demand obligations, and mark-up disclosures;
• Pricing and valuation of illiquid instruments such as variable rate demand obligations, other municipal securities, and non-traded REITs;
• Compliance with Regulation SHO (whether broker-dealers are appropriately relying on the bona fide market-making exception) and Regulation ATS (written safeguards for protection of subscriber information and alignment with Form ATS-N); and
• Best execution policies and order-routing and execution disclosures, including those required under Rule 605 of Regulation NMS.

Regulation Best Interest and Form CRS

Regulation Best Interest establishes the standard of conduct for broker-dealers at the time a recommendation is made to a retail customer in connection with a securities transaction or investment strategy. The content of the customer relationship summary (Form CRS) will continue to be an examination priority. The SEC will continue to assess broker-dealer recommendations to retail investors dealing with investment strategies and products, focusing on account and rollover recommendations (and review of reasonably available alternatives), complex or tax advantaged products (like variable annuities, registered index-linked annuities, ETFs investing in private credit and structured products), dual-registrants’ conflict management and account allocation practices. Recommendations involving complex products, private placements, structured products, and crypto-related securities will receive particular attention. Overall, the Form CRS will be reviewed for accuracy and completion, particularly regarding services, fees, conflicts and disciplinary history.

Key Takeaways

Although the 2026 Priorities provide a roadmap for the SEC’s examination priorities and agenda, it is not an exhaustive list of the issues that the SEC may consider. It is vital that all investment adviser firms, private fund advisers, broker-dealers, and all other firms subject to SEC oversight carefully evaluate the focused topics that may apply to them and consider whether their compliance programs and policies and procedures meet current standards. Firms are urged to consult with legal counsel to review their policies and procedures in connection with emerging risks, enforcement activities, and agency risk alerts to best mitigate risks in 2026 and thereafter.