The federal regulator’s exam priorities highlight risks for broker-dealers and investment advisers, with an emphasis on complex products and private credit.
The Securities and Exchange Commission’s Division of Examinations has released its priorities for 2026, signaling a continued focus on fiduciary standards, compliance programs, and emerging tech risks such as cybersecurity and artificial intelligence.
The annual list published Monday – presumably delayed due to the recently concluded federal government shutdown – gives compliance officers at RIAs, investment companies, and broker-dealers their first fulsome look at regulatory expectations in the coming year.
“Examinations are an important component to accomplishing the agency’s mission, but they should not be a ’gotcha’ exercise,” SEC Chairman Paul S. Atkins said in a statement accompanying Monday’s release. “Today’s release of examination priorities should enable firms to prepare to have a constructive dialogue with SEC examiners and provide transparency into the priorities of the agency’s most public-facing division.”
Investment advisers under the microscope
For RIAs, the SEC will continue to scrutinize adherence to fiduciary standards, including duty of care, duty of loyalty, and best execution. Examiners are expected to review how firms manage conflicts of interest and whether investment advice is suitable for clients’ objectives and risk profiles. The division will also assess the effectiveness of compliance programs, with a focus on annual reviews and disclosures related to fees and compensation structures.
The agency is prioritizing examinations of advisers who have never been examined or who have recently registered, an approach the SEC said is meant to “empower and encourage building robust compliance programs.”
The new priorities also acknowledge how the SEC is “operating with fewer resources” and, as such, will reevaluate how it approaches trends in the markets and new and emerging products.
“The 2026 priorities do not answer how the Division of Examinations will respond to the combined challenges of staff attrition and an industry that grows in both assets and complexity,” said Robert Baker, managing director of ACA Group’s Mock Exam team.
Investment companies and complex products
Investment companies, including mutual funds and ETFs, remain a high priority for the SEC. Examinations will cover compliance programs, disclosures, fees, expenses, and adherence to the “Names Rule,” which requires funds to invest at least eighty percent of assets in line with their stated investment focus.
The enforcement diivision is also paying special attention to funds involved in mergers, those employing complex or illiquid strategies, and products with novel features.
While the SEC’s 2025 priorities called out risks related to commercial real estate and higher interest rates, the regulator now appears to be turning its focus to the increasingly questionable private credit space.
“The 2026 priorities mention private credit as an example of an alternative investment that will be a priority for exams, particularly when retail investors are invested in products exposed to the risks of private credit,” Baker said.
Broker-dealer oversight and retail practices
For broker-dealers, the SEC’s priorities include financial responsibility, customer protection, and operational resiliency. Examiners will look at net capital requirements, risk management, and practices related to cash sweep and prime brokerage services.
Retail sales practices are also in the spotlight, with a focus on compliance with Regulation BI, mitigation of conflicts, and recommendations involving complex or illiquid products. The division will also be reviewing how firms handle dual registration, account selection, and the accuracy of disclosures in Form CRS.
A shift away from crypto enforcement
Previously under Gary Gensler, the agency had made digital assets a visible pillar of its regulatory agenda, though it followed a “regulation by enforcement” approach widely criticized by industry players. In its prior 2025 exam priorities, the SEC highlighted cryptocurrencies as an area of focus, along with “recommendations related to high-cost products, unconventional instruments, illiquid and difficult-to-value assets.”
But with Paul Atkins now at the helm, the SEC is taking a lighter touch in watching over the space. Even as a flood of altcoins comes to the retail space, the commission did not specifically single out digital assets or cryptocurrencies for targeted review or enforcement, instead shifting to broader categories such as emerging financial technology which may include digital assets.
Cybersecurity and fintech risks
Cybersecurity remains a perennial concern, as the SEC will examine how firms protect investor data, prevent service interruptions, and respond to threats such as ransomware and AI-driven attacks. It will also review compliance with new rules, including the 2024 amendments to Regulation S-P, which require written incident response programs for unauthorized access to customer information.
With respect to emerging financial technology, the SEC said it plans to examine the use of automated tools, trading algorithms, and artificial intelligence, assessing whether representations to investors are accurate and whether controls are in place to manage associated risks.
Anti-money laundering and broader risk areas
The SEC will continue to review anti-money laundering programs, emphasizing the need for tailored policies, independent testing, and compliance with customer identification and suspicious activity reporting requirements.
“In this increasingly complex and changing financial and regulatory environment, we strive to improve compliance in a way that that is both transparent and practical,” said Keith Cassidy, acting director of the Division of Examinations.
