SEC Exams Division Announces 2026 Exam Priorities

By Jason Spitalnick

On November 17, 2025, the Division of Examinations (Division) of the U.S. Securities and Exchange Commission (SEC or Commission) released its 2026 Examination Priorities (Priorities). These are the first exam priorities issued under Chairman Paul Atkins, although senior Division leadership remains largely intact from 2025. The document frames the Division’s anticipated workflow against a backdrop of resource/workforce constraints and articulates an “operational effectiveness” approach to promote consistency across the Commission’s national examination program.

In broad strokes, the Priorities are consistent with past years, confirming the Division will maintain its focus on the protection of retail investors, the integrity of market infrastructure, and the operational resiliency of regulated entities. This update provides a summary of the examination focus areas for investment advisers, investment companies, broker-dealers, and other market participants reviewing their compliance programs and exam readiness for the coming year.

Investment Advisers: Fiduciary Standards and Compliance Rigor

The Division continues to prioritize examinations of investment advisers, with a perennial emphasis on whether they are adhering to their fiduciary duties of care and loyalty. This focus is sharpest where retail investors are concerned. Among other things, staff will be scrutinizing advice and disclosures related to investment costs, time horizons, risks associated with recommended strategies, volatility, and liquidity.

Examiners will review recommendations involving complex, high-cost, or illiquid products. The Priorities specifically highlight the risks associated with alternative investments, including private credit strategies and private funds with extended lock-up periods—particularly with respect to seniors and those saving for retirement.

The Division will maintain its heightened scrutiny of dual registrants and advisers with affiliated broker-dealers. The primary concern here is account selection. Examiners will assess whether the recommendation to open an advisory account versus a brokerage account is in the client’s best interest, looking closely at whether fee-based or commission-based structures are more advantageous for the specific client. Compensation arrangements that might incentivize conflicted advice, such as revenue sharing or 12b-1 fees, will be reviewed to ensure they are fully and fairly disclosed.

The Division remains focused on the effectiveness of advisers’ compliance programs under Rule 206(4)-7. Examinations will test whether policies and procedures are tailored to the firm’s specific business model rather than being generic “off-the-shelf” documents. Key areas of focus include portfolio management processes, the accuracy of disclosures and regulatory filings, and the safeguarding of client assets.

The Marketing Rule, Rule 206(4)-1, continues to be a focal point. Examiners will review whether advisers can substantiate material statements of fact in their advertisements and whether performance advertising—particularly regarding hypothetical performance—complies with the specific prohibitions and disclosure requirements of the rule. Additionally, the Division has signaled a focus on advisers’ oversight of third-party service providers. As firms increasingly outsource critical functions such as valuation, portfolio management, and data storage, examiners will expect to see a rigorous vendor diligence and monitoring process.

Registered Investment Companies

The Division’s examination of Registered Investment Companies (RIC) remains centered on the protection of retail investors. The focus for 2026 includes a detailed review of fund fees and expenses, particularly ensuring that any fee waivers or reimbursements are properly applied and disclosed. Governance practices by fund boards will also be under the microscope.

Examiners are likely to prioritize RICs that employ complex or novel investment strategies, particularly those with significant exposure to illiquid assets or those that utilize derivatives to achieve leveraged or inverse returns. The Division will look for consistency between a fund’s marketing materials, its regulatory filings, and its actual portfolio management practices. Furthermore, with the compliance date for the amended Names Rule approaching in late 2026, the Division will begin to assess whether funds are accurately classifying their portfolio holdings.

Broker-Dealers: Regulation Best Interest and Financial Responsibility

The Priorities indicate that broker-dealer examinations will continue to focus on the Net Capital Rule and the Customer Protection Rule, along with related compliance programs.

With respect to retail investors, Regulation Best Interest (Reg BI) remains a cornerstone of the examination program. The Division will assess whether broker-dealers are acting in the best interest of their natural person customers at the time a recommendation is made, without placing their own financial or other interests ahead of the customer’s interest. Examinations will review product and investment strategy recommendations, as well as processes for mitigating conflicts of interest, reviewing reasonably available alternatives, and satisfying the Care Obligation. The Division has indicated it will look closely at recommendations regarding variable annuities, non-traded REITs, and structured products.

Beyond retail sales practices, the Division will continue to focus on equity and fixed-income trading practices. This includes a review of broker-dealer activities associated with extended-hours trading and the sale of municipal securities. Examinations will evaluate firms’ compliance with best execution obligations and the accuracy of their order routing and execution disclosures under Rule 605 of Regulation NMS.

Financial responsibility rules remain an area of focus to ensure customer assets are protected. Examiners will review compliance with the Net Capital Rule and the Customer Protection Rule, assessing the adequacy of internal controls regarding credit, market, and liquidity risk management. There will be a continued evaluation of cash sweep programs and prime brokerage activities, with specific attention paid to counterparty credit risk and concentration limits.

Market-Wide Risks: Operational Resiliency, AI, and Cybersecurity

Operational resiliency is a thematic priority that cuts across all registrant types. In particular, the Division views cybersecurity not just as an IT issue, but as a core compliance function.

Examiners will review registrant practices designed to prevent interruptions to mission-critical services and to protect investor information from ransomware and other cyber threats. A critical new area of focus for 2026 is the implementation of the recently adopted amendments to Regulation S-P. Examiners will assess firms’ progress in establishing incident response programs reasonably designed to detect, respond to, and recover from unauthorized access to customer information. This includes reviewing policies for notifying customers of data breaches within the mandated timeframes.

The Division continues to monitor the use of emerging technologies, but the 2026 Priorities refine the focus on Artificial Intelligence (AI). The emphasis has shifted toward supervision and representations. Examiners will review whether firms have established adequate governance frameworks to monitor the use of AI in trading, fraud prevention, and anti-money laundering (AML) compliance. Crucially, the Division will scrutinize marketing materials to ensure that representations regarding a firm’s AI capabilities are accurate. Firms that claim to use AI models for investment selection or risk management must be able to demonstrate that these models function as advertised.

The Division will continue to focus on AML programs, reviewing whether broker-dealers and certain RICs are appropriately tailoring their programs to their specific business risks. Examiners will test whether firms are conducting independent AML testing, establishing adequate customer identification programs, and meeting their obligations for filing suspicious activity reports.

A Notable Omission

Last year’s exam priorities included a standalone section regarding examinations of registrations offering crypto asset-related services. This year’s Priorities don’t mention the phrases “crypto assets” or “digital assets.” That’s a conspicuous omission in light of the current market climate, but perhaps not surprising in view of previous statements by Commission leadership and the current focus on shifting legislative paradigms.