SEC Outlines 2026 Examination Priorities for Financial Firms

On November 17, 2025, the U.S. Securities and Exchange Commission (SEC) unveiled its examination priorities for the year 2026. This announcement details the focus areas for the Division of Examinations as it reviews investment advisers, broker-dealers, investment companies, and other market participants. The priorities reflect the SEC’s commitment to fostering a compliance-oriented environment, moving away from enforcement-driven regulation.

Core Compliance Themes Identified

The SEC’s priorities underscore a fundamental approach to compliance, emphasizing core issues such as fiduciary duties, conflicts of interest, and adherence to Regulation Best Interest. The Division will closely examine how advisers fulfill their duty of care and duty of loyalty, particularly regarding their investment advice and disclosures to retail investors, including those saving for retirement and older customers.

Investment products under scrutiny will include alternative investments and complex offerings, such as leveraged exchange-traded funds (ETFs). For broker-dealers, the SEC highlighted four main areas of focus: product and investment strategy recommendations, conflict identification and mitigation practices, the review of reasonably available alternatives, and adherence to the Care Obligation. Similar to advisers, broker-dealers’ recommendations concerning complex or alternative products will also be closely monitored.

Technology and Regulatory Compliance

In light of recent amendments to Regulation S-P, the SEC has flagged this regulation as a potential risk area. The Division will assess firms’ internal controls, policies regarding third-party vendors, and governance practices. Additionally, firms will be evaluated on their progress in establishing incident response programs that protect against unauthorized access to customer information. Following the amendments’ implementation, the Division will examine whether firms have maintained adequate safeguards for customer data.

Artificial intelligence (AI) continues to be a focal point for the SEC. The Division plans to investigate how firms utilize emerging technologies, including automated investing tools and trading algorithms. Particular attention will be paid to AI-related disclosures, ensuring firms have robust policies to monitor and supervise the use of these technologies.

Digital assets and cryptocurrency were notably absent from the Division’s examination priorities this year. While this does not imply that firms engaged in crypto-related activities will evade scrutiny, it aligns with the SEC’s recent strategy to encourage innovation within the cryptocurrency space.

The SEC also noted that private funds are included in various examination areas, particularly concerning advisers to newly launched funds and those without prior experience in managing private funds. Recommendations related to private fund products or investments in illiquid assets will be closely reviewed.

Compliance programs for advisers are identified as a “fundamental part” of the examination process. The SEC intends to evaluate six critical areas of these programs: marketing, valuation and trading practices, accuracy of disclosures, custody, and annual reviews. The focus will be on the enforcement of policies and whether disclosures adequately address fee-related conflicts stemming from compensation structures.

Focus on Registered Investment Companies

In alignment with its dedication to protecting retail investors, the SEC will prioritize the examination of registered investment companies (RICs), including mutual funds and ETFs. The Division will scrutinize fund fees and expenses, portfolio management practices, and the accuracy of related disclosures. Newly registered RICs or those that have not undergone examination previously will also be in the spotlight.

Moreover, the SEC plans to monitor RICs involved in mergers or similar transactions and those employing complex strategies or holding significant amounts in less liquid assets. The use of novel investment strategies, including leveraged funds, will also receive close examination.

The SEC’s 2026 examination priorities reflect a comprehensive approach to ensuring compliance across key areas of the financial landscape. By emphasizing transparency and proactive measures, the Division of Examinations aims to foster a more resilient and trustworthy investment environment.