On November 17, 2025, the Securities and Exchange Commission (“SEC”)’s Division of Examinations (the “Division”) released its 2026 examination priorities that highlight examination topics that the Division plans to focus on over the upcoming year.[1]

The 2026 priorities are the first issued under SEC Chairman Paul Atkins. The Message from the Leadership Team that introduced the priorities noted new challenges, including the need for the Division to meet evolving risks, such as developments in the U.S. capital markets and broader economic and geopolitical forces. It also noted that the Division was operating with “fewer resources.”² However, the Leadership Message stated that the Division remains focused on advancing its “Four Pillars to promote compliance, prevent fraud, inform policy, and monitor risk.”³ Thus, while there were some notable changes to the priorities this year, many of the priorities from 2025—as covered by this blog—remained unchanged. Below is a summary of examination focus areas across investment advisers, investment companies, broker-dealers, and other market participants.

Investment Advisers

A recurring area of Division focus for investment advisers is their adherence to the duty of care and duty of loyalty.⁴ To examine an adviser’s adherence to these duties, the Division said it would review conflicts of interest, best execution, and consideration of various factors associated with their investment advice, including cost, investment objectives, liquidity, risks and potential benefits, volatility, and characteristics of an investment product or strategy—including “special or unusual features.”

The Division stated that it would focus especially on:

• Alternative investments (e.g., private credit and private funds with extended lockups), complex investments (including certain exchange-traded funds (“ETFs”), and higher‑cost products;
• Investment recommendations for consistency with product disclosures and the clients’ investment objectives, risk tolerance, and financial/personal backgrounds, including recommendations to older investors and those saving for retirement, advisers that advise both private funds and separately managed accounts or newly registered funds, advisers to newly launched private funds, recommendations of products sensitive to market volatility, and advisers that have not previously advised private funds;
• Advisers and business practices that may create additional risks or conflicts of interest, such as dually registered broker-dealers, advisers utilizing third-parties to access clients’ accounts, and advisers that have recently undergone a merger with or have been acquired by an existing adviser; and
• Advisers that have never been examined, with a focus on newly registered advisers and advisers that have undergone significant business change.

The Division also noted that it would continue to assess the effectiveness of advisers’ compliance programs, with a broad focus on whether the policies and procedures address compliance with the Investment Advisers Act of 1940. The Division stated that it will examine (1) whether the policies and procedures are implemented and enforced; and (2) whether disclosures address fee-related conflicts. However, the focus of an examination may shift depending on an adviser’s business and whether their business models have changed or are new to advising particular types of assets, clients, or services.

Registered Investment Companies

Registered investment companies (“RICs”)—such as mutual funds and ETFs—continue to be a focus for the Division in 2026.⁵ As in prior years, the Division will focus on compliance programs, disclosures, and governance practices. In particular, the Division noted that it will be looking at fund fees and expenses and portfolio management practices.

The Division also discussed developing areas of interest, which include:

• RICs that participate in mergers or similar transactions;
• Certain RICs that use complex strategies and/or have significant holdings of less liquid or illiquid investments (e.g., closed end funds); and
• RICs with novel strategies or investments.

As with Investment Advisors, the Division noted that its prioritization would be RICs that have never been examined.

Broker-Dealers

The Division set out three key priorities for its examination of broker-dealers.⁶

• Financial Responsibility Rules. The Division indicated that compliance with the net-capital rule, the customer protection rule and related internal processes, procedures, and controls will continue to be a focus. In conducting its review, the Division stated that it plans to assess (1) operational resiliency programs; (2) broker-dealer credit, market, and liquidity risk management controls, including liquidity levels for stress events; and (3) cash sweep programs and prime brokerage activities.
• Trading-Related Practices and Services. Broker-dealer equity and fixed income trading practices remain a Division priority. However, the priorities diverged from prior years in that the Division announced that, in doing so, it would examine alternative trading systems, including a focus on their compliance with the requirements to have written safeguards to protect confidential subscriber information under Rule 301(b)(1) under Regulation ATS, alignment with their descriptions in the Form ATS-N, disclosures, and risk controls. Otherwise, the Division plans to continue to analyze broker-dealer trading practices associated with extended hours trading and municipal securities, broker-dealers’ routing and execution of orders, and compliance with Regulation SHO, as it has previously.
• Retail Sales Practice, Including Compliance With Regulation Best Interest. Regulation Best Interest (“Reg BI”), governs recommendations to natural persons. The Division outlined that its particular focus when examining compliance with this regulation will be:
  • Recommendations with regard to products and investment strategies;
  • Conflict identification and mitigation practices;
  • Processes for reviewing reasonably available alternatives; and
  • Processes for satisfying the Care Obligation.

In particular, the Division plans to review recommended products that are complex or tax advantaged. It noted that it may also focus on dual registrants and broker-dealer supervision of sales practices at branch office locations.

Other Market Participants

In addition to the examination priorities for industry participants listed above, the release also included priorities for self-regulatory organizations—including national securities exchanges and FINRA—clearing agencies, municipal advisors, transfer agents, funding portals, security-based swap dealers, and security-based swap execution facilities (“SBSEFs”).⁷ In particular, with respect to SBSEFs, the Division noted that it expects to begin conducting examinations of registered SBSEFs this year, focusing on rules and related internal policies and procedures addressing trade monitoring, trade processing, and participation.

Risk Areas Impacting Various Market Participants

As with the 2025 examination priorities, the Division included in this year’s priorities a discussion of risk areas impacting various market participants. While the Division continues to highlight certain risks from 2025, perhaps most notable is what the Division did not include. Unlike in recent years, the 2026 priorities do not include crypto assets or crypto-related products as a standalone examination priority. The exclusion appears to reflect the current administration’s support for this asset class.

Cybersecurity

As in prior years, cybersecurity remains a Division priority.⁸ The Division stated that it will continue to review registrant practices to prevent interruptions to mission-critical services and to protect investor information, records, and assets, as well as registrants’ procedures and practices to assess whether they are reasonably managing information security and operational risks. Moreover, a particular focus outlined in the report will be firms’ identification and mitigation of risks associated with artificial intelligence and polymorphic malware attacks.

Regulation S-ID and Regulation S-P

For Regulation S-ID, the Division stated that it will focus on firms’ development and implementation of a written Identity Theft Prevention Program.⁹ The Division plans to assess whether firms’ programs can identify and detect red flags, particularly during customer account takeovers and fraudulent transfers and provide training on identity theft prevention.

In preparation for the 2025 and 2026 compliance dates for the Commission’s amendments to Regulation S-P, the Division will review firms’ progress in preparing incident response programs. The release also noted that, after the applicable compliance dates, the Division will examine whether firms have maintained policies and procedures in accordance with the rule’s new provisions that address administrative, technical, and physical safeguards to protect customer information.

Emerging Financial Technology

Emerging financial technologies—such as automated tools, AI, algorithms, and alternative data—remain a critical area of risk for the Division.¹⁰ It plans to continue to focus on registrants’ use of such technologies and will review registrant disclosure for accuracy and policies and procedures to monitor and/or supervise their use of AI.

Regulation Systems Compliance and Integrity (“SCI”)

The Division’s review of SCI entities will focus on policies and procedures related to incident response and how entities review the effectiveness of these policies and procedures, as well as management of third-party vendor risk and proper identification of vendor systems that qualify as SCI systems or indirect SCI systems.¹¹

Anti-Money Laundering

Under the Bank Secrecy Act (“BSA”), certain financial institutions are required to establish Anti-Money Laundering (“AML”) programs that include policies, procedures, and internal controls reasonably designed to achieve compliance with the BSA and its implementing rules, including identifying and verifying the identity of customers and conducting ongoing monitoring to identify and report suspicious transactions.

As in prior years, the Division plans to review whether registrants are:¹²

• Appropriately tailoring their AML program to their business model and associated AML risks;
• Conducting independent testing;
• Establishing an adequate customer identification program, including for beneficial owners of legal entity customers;
• Meeting their Suspicious Activity Report (“SAR”) filing obligations; and
• Monitoring Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) sanctions and related sanctions compliance.

Conclusion

The 2026 examination priorities maintained historic areas of focus for industry participants—such as fiduciary duties, conflicts of interest, and retail investor protection. Yet, the Division also emphasized more recent and developing areas of focus, such as cybersecurity and AI. However, most notable was what was missing from the priorities. As with last year’s priorities, environmental, social, and governance (“ESG”) investing was not mentioned this year. And whereas crypto assets were specifically listed as a focus in 2025, the 2026 priorities did not mention this asset class.

While the release provides important guidance, as the priorities note, it is important for industry participants to remember that while the SEC published its current priorities for 2026, these priorities can change throughout the year in order to respond to market changes, including regional issues, emerging market issues, or enforcement actions.