The U.S. Securities and Exchange Commission Division of Examinations has released its 2026 examination priorities. The priorities address examination areas associated with each category of registrant: investment advisers, investment companies, broker-dealers, and others involved in the execution of various securities transactions.

The 2026 priorities continue the SEC’s concentration on retail investor protection by examining whether compliance programs effectively ensure proper oversight and conformity to the securities laws. To this end, the division intends to publish risk alerts to inform registrants of observed compliance processes that meet SEC standards as a means of strengthening compliance programs in various industries.

Here’s a look at what the division’s 2026 priorities will address as key risk areas for each category of registrant.

Investment Advisers

This group will see heightened scrutiny of their fiduciary obligations, particularly with respect to how they recommend and monitor complex or higher-cost products. Advisers that operate as dual registrants will face increased examination where financial incentives may create a conflict of interest and may influence recommendations. The SEC also intends to closely review advisers that have recently registered, have undergone mergers or consolidations, or have begun advising private funds for the first time.

Compliance program effectiveness remains a core expectation, including:

• Procedures that test and confirm firm governance standards.
   
• Valuation practices.
   
• Disclosures in public filings and through general and individual client communications.
   
• Use of third-party service providers.
   
• Annual reviews of the effectiveness of firm compliance programs.

The SEC will also look at whether the policies and procedures are properly implemented and adequately enforced.

Registered Investment Companies

The Division of Examinations continues to prioritize registered investment company (or fund) compliance programs that address assessment of fund disclosure accuracy, integrity of portfolio management practices, and adequacy of valuation controls. Funds that employ new, complex, or highly illiquid strategies such as those with significant leverage vulnerabilities or exposure to private credit, will receive particular attention.

Never-before-examined funds remain a priority in order to encourage early development of robust compliance cultures.

Broker-Dealers

This group is likely to encounter substantial examination efforts on both their financial responsibility obligations and their sales practices. The SEC intends to review firms' compliance with the Net Capital Rule and Customer Protection Rule, emphasizing compliance concerns over liquidity management, credit and market risk controls, and oversight of third-party vendors.

Trading-related examinations will concentrate on best execution and Regulation Best Interest as the SEC continues to dissect compliance controls around potential conflicts of interest, particularly regarding recommendations involving rollover decisions, account selection, and complex or tax-advantaged products. Adherence to Regulation Best Interest’s Care Obligations — reasonable diligence, care, and skill in making investment recommendations to clients — will be a focus for the division’s assessment of compliance procedures that ensure appropriate consideration of the customer’s investment profile and the characteristics of the type of investment account and the individual investments recommended to each customer.

Security-Based Swap Dealers (SBSDs) and Security-Based Swap Execution Facilities (SBSEFs)

These two groups can expect the SEC to hone in on risk management practices and oversight procedures that minimize sources of operational risk. The SEC wants to see accurate and complete security-based swap reporting that the investing public and the commission can rely upon. Whether internal policies and procedures sufficiently ensure crucial regulatory compliance and maintain transparency of the security-based swap markets will be a key consideration during examinations.

Final Takeaways

Each of these categories of registrants will be examined for compliance with regulatory standards for current and emerging high-risk areas. For instance, cybersecurity practices and operational resiliency plans will be examined to ensure that a cybersecurity attack will not disrupt mission-critical services. The SEC will review whether firms maintain strong governance frameworks, enforce satisfactory access controls, employ data loss prevention measures, and have compliance policies for timely and effective remediation if a cybersecurity incident does occur. The compliance implications of artificial intelligence, including whether firms make accurate claims about their AI capabilities and the use of algorithms for trading, client recommendations, fraud detection, or anti-money laundering (AML) functions, will increase scrutiny of cyber policies to ensure appropriate governance and monitoring.

AML compliance also remains an examination priority for certain financial institutions, including broker-dealers and registered investment companies. AML programs will be evaluated to determine whether they are reasonably tailored to the registrant’s business models, effectively conduct customer identification procedures, and satisfy suspicious activity report filing obligations. Registrants must also demonstrate ongoing monitoring of Office of Foreign Assets Control (OFAC) sanctions lists to ensure compliance.

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