SEC Announces 2026 Examination Priorities
12/15/2025On November 17, 2025, the Securities and Exchange Commission’s Division of Examinators (“DOE”) announced its examination priorities for 2026 (“2026 Exam Priorities”) (available here). DOE publishes its examination priorities annually to provide transparency to registrants and investors about the topics that DOE plans to focus on in the new fiscal year and to encourage firms to direct their compliance efforts on areas of potentially heightened risk to investors that firms should consider as they review and strengthen their compliance programs.
The 2026 Exam Priorities are developed through collaboration with other divisions and offices of the SEC, prior years’ examinations, market events, information gathered from investors, registrants, industry groups and other regulators. The 2026 Exam Priorities continue to focus on long-standing themes of fiduciary duties, compliance program effectiveness and retail investor protection. The 2026 Exam Priorities acknowledge that DOE is operating with fewer resources and as a result, must reevaluate its risk-based priorities while continuing to maintain an effective examination process.
Despite changes in leadership and priorities, DOE remains grounded in its “four pillars,” to (1) promote compliance, (2) prevent fraud, (3) inform policy and (4) monitor risk.
Fiscal Year 2026 Exam Priorities
I. Investment Advisers
A. Adherence to Fiduciary Standards of Conduct
B. Effectiveness of Advisers’ Compliance Programs
C. Never-Examined Advisers and Recently Registered Advisers
B. Effectiveness of Advisers’ Compliance Programs
C. Never-Examined Advisers and Recently Registered Advisers
II. Investment Companies
III. Broker-Dealers
A. Broker-Dealer Financial Responsibility Rules
B. Broker-Dealer Trading-Related Practices and Services
C. Retail Sales Practice, Including Compliance with Regulation Best Interest
B. Broker-Dealer Trading-Related Practices and Services
C. Retail Sales Practice, Including Compliance with Regulation Best Interest
IV. Self-Regulatory Organizations
A. National Securities Exchanges
B. FINRA
C. Municipal Securities Rulemaking Board
B. FINRA
C. Municipal Securities Rulemaking Board
V. Clearing Agencies
VI. Other Market Participants
A. Municipal Advisors
B. Transfer Agents
C. Funding Portals
D. Security-Based Swap Dealers
E. Security-Based Swap Execution Facilities
B. Transfer Agents
C. Funding Portals
D. Security-Based Swap Dealers
E. Security-Based Swap Execution Facilities
VII. Risk Areas Impacting Various Market Participants
A. Information Security and Operational Resiliency
- Cybersecurity
- Regulation S-ID and Regulation S-P
B. Emerging Financial Technology
C. Regulation Systems Compliance and Integrity
D. Anti-Money Laundering
C. Regulation Systems Compliance and Integrity
D. Anti-Money Laundering
I. Investment Advisers
A. Adherence to Fiduciary Standards of Conduct
Examining investment advisers’ adherence to their duties of care and loyalty remains a priority for DOE, particularly with regard to aspects of their business that serve retail investors. DOE will review investment advice and related disclosures provided to clients for consistency with their fiduciary obligations, such as: (1) the impact of advisers’ conflicts of interest on providing impartial advice; (2) advisers’ consideration of the various factors associated with their investment advice, including cost, investment product or strategy’s investment objectives, characteristics, liquidity, risks and potential benefits, volatility, likely performance in a variety of market and economic conditions, time horizon and cost of exit; and (3) best execution.
DOE will focus on:
- Investment products, including: (1) alternative investments; (e.g., private credit and private funds with investment lock-up for extended periods); (2) complex investments (e.g., certain exchange-traded funds; and (3) higher cost products.
- Investment recommendations for consistency with product disclosures and the clients’ investment objectives, risk tolerance, and financial/personal backgrounds, with emphasis on: (1) recommendations to older investors and those saving for retirement; (2) advisers to private funds that also are advising separately managed accounts and/or newly registered funds; (3) advisers to newly launched private funds; (4) recommendations of certain products that may be particularly sensitive to market volatility; and (5) advisers that have not previously advised private funds. In addition, DOE will focus on advisers and advisory services that may create additional risks and potential or actual conflicts of interest, such as: (1) advisers that are dually registered as broker-dealers; (2) advisers utilizing third-parties to access clients’ accounts, where controls may be insufficient to protect client assets and data; and (3) advisers that have merged or been acquired by another adviser.
B. Effectiveness of Advisers’ Compliance Programs DOE examinations focus on the effectiveness of advisers’ compliance programs as they relate to marketing, valuation, trading, portfolio management, disclosure and filings, custody, and advisers’ annual reviews of the effectiveness of their compliance programs. DOE continues to focus on whether an adviser’s policies and procedures are reasonably designed to address conflicts of interest and whether the policies and procedures are implemented and enforced.
Examinations also may focus on compliance practices when advisers change their business models.
Examinations also may focus on compliance practices when advisers change their business models.
C. Never-Examined Advisers and Recently Registered Advisers
DOE will prioritize examinations of advisers that have never been examined before and recently registered advisers.
II. INVESTMENT COMPANIES
DOE continues to prioritize examinations of registered investment companies (“RICs”) due to their importance to retail investors, particularly those saving for retirement.
Examinations of RICs will generally include their compliance programs, disclosures, filings and governance practices. Focus areas will include: (1) fund fees and expenses and any associated waivers and reimbursements; and (2) portfolio management practices and disclosures for consistency with statements about investment strategies or approaches, fund filings and marketing materials, and the amended fund “Names Rule” (after the compliance date).
DOE also will continue to monitor RICs that: (1) participate in mergers or similar transactions; (2) use complex strategies and/or have significant holdings of less liquid or illiquid investments; and (3) use novel strategies or investments, including funds with leverage vulnerabilities.
As with adviser examinations, DOE will continue to prioritize examinations of never-before-examined RICs and recently registered RICs.
Examinations of RICs will generally include their compliance programs, disclosures, filings and governance practices. Focus areas will include: (1) fund fees and expenses and any associated waivers and reimbursements; and (2) portfolio management practices and disclosures for consistency with statements about investment strategies or approaches, fund filings and marketing materials, and the amended fund “Names Rule” (after the compliance date).
DOE also will continue to monitor RICs that: (1) participate in mergers or similar transactions; (2) use complex strategies and/or have significant holdings of less liquid or illiquid investments; and (3) use novel strategies or investments, including funds with leverage vulnerabilities.
As with adviser examinations, DOE will continue to prioritize examinations of never-before-examined RICs and recently registered RICs.
III. BROKER-DEALERS
A. Broker-Dealer Financial Responsibility Rules
DOE will continue to focus on broker-dealer compliance with the net capital rule, the customer protection rule and related internal processes, procedures and controls. Examinations will include review of the timeliness of financial notifications and other required filings, and firm’s “operational resiliency programs” relating to supervision of third-party/vendor-provided services that are used to prepare financial reporting information. DOE will assess broker-dealer credit, market, and liquidity risk management controls to ensure sufficient liquidity to manage stress events, and will evaluate cash sweep programs.
DOE will continue to focus on broker-dealer compliance with the net capital rule, the customer protection rule and related internal processes, procedures and controls. Examinations will include review of the timeliness of financial notifications and other required filings, and firm’s “operational resiliency programs” relating to supervision of third-party/vendor-provided services that are used to prepare financial reporting information. DOE will assess broker-dealer credit, market, and liquidity risk management controls to ensure sufficient liquidity to manage stress events, and will evaluate cash sweep programs.
B. Broker-Dealer Trading-Related Practices and Services
DOE will continue to prioritize broker-dealer equity and fixed income trading practices, including practices associated with extended hours trading, municipal securities, order priority, and mark-ups disclosure. DOE will review broker-dealers’ routing and execution of orders, including: (1) best execution; (2) the pricing and valuation of illiquid instruments; and (3) disclosures regarding order routing and order execution information.
DOE also will review whether broker-dealers are appropriately relying on the bona fide “market making exception” under Regulation SHO, including whether quoting activity is “away from the inside bid/offer.” DOE also will examine alternative trading systems for compliance with requirements to maintain written safeguards to protect subscriber confidential information.
C. Retail Sales Practice, Including Compliance with Regulation Best Interests (“Reg BI”)
DOE will continue to examine broker-dealer sales practices related to Reg BI, including the following: (1) recommendations with regard to products and investment strategies; (2) conflict identification and mitigation practices; (3) processes for reviewing reasonably available alternatives; and (4) processes for satisfying the “Care Obligation,” in light of a customer’s investment profile and the product and account type characteristics considered.
DOE examinations also will focus on recommended products that are complex or tax advantaged; ETFs that invest in illiquid assets; municipal securities; private placements; structured products; alternative investments; other products that have complex fee structures or return calculations; recommendations that move an investment to a substantially similar product or relate to opening different account types; and recommendations made to older investors and those saving for retirement.
Similar to priorities with respect to investment advisers, examinations also may focus on dual registrants and encompass reviews of firms’ processes for identifying and mitigating and eliminating conflicts of interest, account allocation practices and account selection practices. Examinations also may assess broker-dealer supervision of sales practices at branch offices.
DOE examinations will review the content of a broker-dealer’s relationship summary (Form CRS), particularly how the broker-dealer describes: (1) relationships and services that it offers to retail investors; (2) fees and costs; (3) conflicts of interest; and (4) whether the broker-dealer accurately discloses its and its financial professionals’ disciplinary history.
DOE will continue to prioritize broker-dealer equity and fixed income trading practices, including practices associated with extended hours trading, municipal securities, order priority, and mark-ups disclosure. DOE will review broker-dealers’ routing and execution of orders, including: (1) best execution; (2) the pricing and valuation of illiquid instruments; and (3) disclosures regarding order routing and order execution information.
DOE also will review whether broker-dealers are appropriately relying on the bona fide “market making exception” under Regulation SHO, including whether quoting activity is “away from the inside bid/offer.” DOE also will examine alternative trading systems for compliance with requirements to maintain written safeguards to protect subscriber confidential information.
C. Retail Sales Practice, Including Compliance with Regulation Best Interests (“Reg BI”)
DOE will continue to examine broker-dealer sales practices related to Reg BI, including the following: (1) recommendations with regard to products and investment strategies; (2) conflict identification and mitigation practices; (3) processes for reviewing reasonably available alternatives; and (4) processes for satisfying the “Care Obligation,” in light of a customer’s investment profile and the product and account type characteristics considered.
DOE examinations also will focus on recommended products that are complex or tax advantaged; ETFs that invest in illiquid assets; municipal securities; private placements; structured products; alternative investments; other products that have complex fee structures or return calculations; recommendations that move an investment to a substantially similar product or relate to opening different account types; and recommendations made to older investors and those saving for retirement.
Similar to priorities with respect to investment advisers, examinations also may focus on dual registrants and encompass reviews of firms’ processes for identifying and mitigating and eliminating conflicts of interest, account allocation practices and account selection practices. Examinations also may assess broker-dealer supervision of sales practices at branch offices.
DOE examinations will review the content of a broker-dealer’s relationship summary (Form CRS), particularly how the broker-dealer describes: (1) relationships and services that it offers to retail investors; (2) fees and costs; (3) conflicts of interest; and (4) whether the broker-dealer accurately discloses its and its financial professionals’ disciplinary history.
IV. SELF-REGULATORY ORGANIZATIONS
A. National Securities Exchanges
DOE will examine the national securities exchanges to assess whether they are meeting their obligations to enforce compliance with the exchanges’ own rules and the federal securities laws. Examinations also may focus on regulatory programs and participation in National Market System Plans.
B. Financial Industry Regulatory Authority (“FINRA”)
DOE conducts risk-based oversight examinations of FINRA. It selects areas within FINRA to examine through a risk assessment process designed to identify those aspects of FINRA’s operations important to the protection of investors and market integrity, including FINRA’s implementation of investor protection initiatives. Based on the outcome of the risk assessment process, DOE conducts inspections of FINRA’s major regulatory programs. DOE also conducts oversight examinations of FINRA’s examinations of certain broker-dealers and municipal advisors that are FINRA members.
C. Municipal Securities Rulemaking Board (“MSRB”)
DOE applies a risk assessment process similar to the one it uses to oversee FINRA, to identify areas to examine at the MSRB.
B. Financial Industry Regulatory Authority (“FINRA”)
DOE conducts risk-based oversight examinations of FINRA. It selects areas within FINRA to examine through a risk assessment process designed to identify those aspects of FINRA’s operations important to the protection of investors and market integrity, including FINRA’s implementation of investor protection initiatives. Based on the outcome of the risk assessment process, DOE conducts inspections of FINRA’s major regulatory programs. DOE also conducts oversight examinations of FINRA’s examinations of certain broker-dealers and municipal advisors that are FINRA members.
C. Municipal Securities Rulemaking Board (“MSRB”)
DOE applies a risk assessment process similar to the one it uses to oversee FINRA, to identify areas to examine at the MSRB.
V. CLEARING AGENCIES
Title VIII of the Dodd-Frank Act requires the SEC to examine, at least once annually, each clearing agency designated as “systemically important” and for which the SEC serves as the supervisory agency. The examinations conducted by DOE focus on clearing agencies’ core risks, processes, and controls and cover the specific areas required by statute, including the nature of clearing agencies’ operations and assessment of financial and operational risk. DOE will conduct risk-based examinations of other registered clearing agencies that are not designated as systemically important that focus on compliance with the SEC’s Standards for Covered Clearing Agencies, which require policies and procedures that address core risk-management functions.
Examinations of registered clearing agencies include both risk-based examinations and corrective action reviews, and are undertaken to assess: (1) the clearing agencies’ risk management frameworks; (2) the adequacy and timeliness of their remediation of prior deficiencies; and (3) other risk areas. In addition, DOE examines security-based swap data repositories, and entities operating pursuant to an SEC order exempting them from the clearing agency registration requirement.
VI. OTHER MARKET PARTICIPANTS
A. Municipal Advisors
DOE will continue to examine whether municipal advisors have met their fiduciary duty to municipal entity clients when providing advice regarding the pricing or method of sale of municipal securities, and whether municipal advisors have complied with MSRB Rule G-42, which establishes the standards of conduct and duties applicable to non-solicitor municipal advisors. DOE also will continue to assess whether municipal advisors have made required filings with the SEC and met their professional qualification, registration, recordkeeping, and supervision requirements.
B. Transfer Agents
DOE will continue to examine transfer agents’ processing of items and transfers, recordkeeping and record retention, safeguarding of funds and securities, and filings with the SEC. Examinations will focus on transfer agents that use emerging technology to perform their transfer agent functions. After the compliance date, DOE will examine transfer agents for compliance with the 2024 amendments to Regulation S-P.
C. Funding Portals
DOE will continue focus on funding portal arrangements with qualified third-parties regarding the maintenance and transmission of investor funds and whether they are making and preserving required records. DOE will review funding portals’ written policies and procedures to assess if they are reasonably designed to achieve compliance with applicable federal securities laws and rules relating to its business as a funding portal. After the compliance date, DOE will examine funding portals for compliance with the 2024 amendments to Regulation S-P.
D. Security-Based Swap Dealers (“SBSDs”)
DOE examinations will continue to focus on whether SBSDs are complying with their obligations under Regulation SBSR to accurately report security-based swap transactions to security-based swap data repositories. DOE also will focus on SBSDs’ risk management practices and compliance with capital, margin and segregation requirements, and will assess whether SBSDs have taken corrective action to address issues identified in prior examinations.
E. Security-Based Swap Execution Facilities (“SBSEFs”)
DOE will continue to examine whether municipal advisors have met their fiduciary duty to municipal entity clients when providing advice regarding the pricing or method of sale of municipal securities, and whether municipal advisors have complied with MSRB Rule G-42, which establishes the standards of conduct and duties applicable to non-solicitor municipal advisors. DOE also will continue to assess whether municipal advisors have made required filings with the SEC and met their professional qualification, registration, recordkeeping, and supervision requirements.
B. Transfer Agents
DOE will continue to examine transfer agents’ processing of items and transfers, recordkeeping and record retention, safeguarding of funds and securities, and filings with the SEC. Examinations will focus on transfer agents that use emerging technology to perform their transfer agent functions. After the compliance date, DOE will examine transfer agents for compliance with the 2024 amendments to Regulation S-P.
C. Funding Portals
DOE will continue focus on funding portal arrangements with qualified third-parties regarding the maintenance and transmission of investor funds and whether they are making and preserving required records. DOE will review funding portals’ written policies and procedures to assess if they are reasonably designed to achieve compliance with applicable federal securities laws and rules relating to its business as a funding portal. After the compliance date, DOE will examine funding portals for compliance with the 2024 amendments to Regulation S-P.
D. Security-Based Swap Dealers (“SBSDs”)
DOE examinations will continue to focus on whether SBSDs are complying with their obligations under Regulation SBSR to accurately report security-based swap transactions to security-based swap data repositories. DOE also will focus on SBSDs’ risk management practices and compliance with capital, margin and segregation requirements, and will assess whether SBSDs have taken corrective action to address issues identified in prior examinations.
E. Security-Based Swap Execution Facilities (“SBSEFs”)
DOE expects to begin conducting examinations of registered SBSEFs focusing on the SBSEF’s rules and internal policies and procedures that address trade monitoring, trade processing and participation. DOE plans to assess how SBSEFs establish programs of risk analysis and oversight to identify and minimize sources of operational risk.
VII. RISK AREAS IMPACTING VARIOUS MARKET PARTICIPANTS
A. Information Security and Operational Resiliency
- Cybersecurity
Cybersecurity remains a perennial priority. DOE will continue to review registrant practices to prevent interruptions to “mission-critical services” and to protect investor information, records and assets from operational disruption due to cybersecurity attacks, firms’ dispersed operations, weather-related events and geopolitical concerns. DOE also will examine registrants’ procedures and practices to assess whether they are reasonably managing information security and operational risks. DOE will pay particular attention to firms’ policies and procedures pertaining to governance practices, data loss prevention, access controls, account management, and responses and recovery to cyber-related incidents, including those related to ransomware attacks. In addition, focus will be on training and security controls that firms are employing to identify and mitigate new risks associated with artificial intelligence (AI) and “polymorphic malware attacks.
- Regulation S-ID and Regulation S-P
DOE will assess compliance with Regulations S-ID and S-P, focusing on firms’ policies and procedures, internal controls, oversight of third-party vendors and governance practices. Regarding Regulation S-ID, DOE will focus on firms’ development and implementation of a written “Identity Theft Prevention Program” — a program designed to detect, prevent, and mitigate identity theft. DOE will assess whether the firms’ policies and procedures: (1) are reasonably designed to identify and detect red flags, particularly during customer account takeovers and fraudulent transfers; and (2) include training on identity theft prevention.
In preparation for the compliance dates for the SEC’s amendments to Regulation S-P, DOE will evaluate firms’ progress preparing “incident response programs”. After the applicable compliance dates, DOE will examine whether firms have developed, implemented, and maintained policies and procedures that address administrative, technical and physical safeguards for the protection of customer information.
B. Emerging Financial Technology
DOE remains focused on registrants’ use of emerging technologies, such as automated investment tools, AI technologies, and trading algorithms or platforms, and the risks associated with their use. The examinations will assess whether: (1) representations are fair and accurate; (2) operations and controls in place are consistent with disclosures made to investors; (3) algorithms lead to advice or recommendations consistent with investors’ investment profiles or stated strategies; and (4) controls to confirm that advice or recommendations resulting from automated tools are consistent with regulatory obligations to investors, including retail and older investors.
DOE will review for accuracy registrant representations regarding their AI capabilities, and will assess whether firms have implemented adequate policies and procedures to monitor and/or supervise their use of AI technologies, including for tasks related to fraud prevention and detection, back-office operations, anti-money laundering (AML), trading functions and automation of internal processes.
C. Regulation Systems Compliance and Integrity (“SCI”)
DOE will review for accuracy registrant representations regarding their AI capabilities, and will assess whether firms have implemented adequate policies and procedures to monitor and/or supervise their use of AI technologies, including for tasks related to fraud prevention and detection, back-office operations, anti-money laundering (AML), trading functions and automation of internal processes.
C. Regulation Systems Compliance and Integrity (“SCI”)
DOE’s examination of SCI entities will continue to focus on: (1) policies and procedures related to incident response and how SCI entities review the effectiveness of these policies and procedures; and (2) SCI entities’ management of third-party vendor risk and their ability to identify vendor SCI systems.
D. Anti-Money Laundering (“AML”)
AML programs should be reasonably designed to prevent brokers-dealers and certain RICs from being used for money laundering or the financing of terrorist activities and to achieve and monitor compliance with applicable Bank Secrecy Act requirements. DOE will continue to focus on AML programs and review whether broker-dealers and certain RICs are adequately: (1) tailoring and updating their AML program to their business model and associated AML risks; (2) conducting independent testing; (3) establishing a customer identification program; and (4) meeting their Suspicious Activity Report (“SAR”) filing obligations. Examinations of certain RICs also will review policies and procedures for oversight of applicable financial intermediaries. DOE will review whether broker-dealers, advisers and RICs are monitoring the Department of Treasury’s Office of Foreign Assets Control sanctions and ensuring compliance with such sanctions.
CONCLUSION
The 2026 Exam Priorities are the first annual examination priorities published under SEC Chairman Paul S. Atkins. DOE reiterated that its examination priorities are not exhaustive of all the areas on which DOE will focus. Examinations will include analysis of other risk factors, and its priorities may shift in response to new and emerging risks, products, services, market events or investor concerns. Chairman Atkins stated that DOE’s examinations should not be a “gotcha” exercise and that the 2026 Exam Priorities should “provide transparency into the priorities of the agency’s most public-facing division [DOE].”If you receive a notice of a DOE examination or would like assistance preparing for such an examination, or if you would like assistance establishing or updating your existing compliance program, please contact Meryl Wiener (mwiener@wbny.com or 212-984-7731), any of the undersigned, or your regular Warshaw Burstein attorney
