The U.S. Securities and Exchange Commission (SEC) released its annual examination report for 2026. This publication outlines its examination priorities, providing transparency and guidance to registrants and market participants. We compared the Fiscal Year 2025 and 2026 Examination Priorities report, which reveals both continuity and evolution in the SEC’s focus, with notable changes and new emphases for 2026.
Continuity in Core Priorities
Both years maintain a strong focus on protecting investors, maintaining fair and orderly markets, and facilitating capital formation. The Division’s Four Pillars – promoting compliance, preventing fraud, informing policy, and monitoring risk – remain central. Key areas of examination persist across both years, including:
Investment Advisers
Adherence to fiduciary standards, effectiveness of compliance programs, and prioritization of never-examined and newly registered advisers. Emphasis will continue to be on transparency of disclosures for conflict of interest and fund costs, performance, and investment objectives.
Investment Companies
Focus on registered investment companies (RICs), including mutual funds and ETFs, with attention to compliance programs, disclosures, fees, expenses, and governance.
Broker-Dealers
Continued emphasis on Regulation Best Interest, Form CRS, financial responsibility rules, trading-related practices, and retail sales practices.
Self-Regulatory Organizations
Oversight of national securities exchanges to ensure compliance with the exchanges’ own rules, FINRA investor protection initiatives, and the Municipal Securities Rulemaking Board (MSRB).
Clearing Agencies
Annual examinations of systemically important clearing agencies and risk-based reviews of other registered clearing agencies.
Other Market Participants
Examination of municipal advisors, including pricing of such services, transfer agents, security-based swap dealers (SBSDs), security-based swap execution facilities (SBSEFs), and funding portals, continues to be a point of emphasis for the SEC in its prioritization.
Risk Areas
Review of policies and procedures related to information security, cybersecurity, anti-money laundering (AML), and compliance with Office of Foreign Assets Control sanctions.
Key Changes and New Emphases in 2026
While the 2025 priorities set the foundation, the 2026 report introduces several updates and areas of heightened focus:
Format and Transparency
The 2026 priorities are published in a format intended for near-term updates, signaling a commitment to ongoing transparency and adaptability, which includes publishing Risk Alerts that will highlight observed compliance approaches that registrants may consider in strengthening their compliance programs.
Leadership and Strategic Projects
The 2026 report highlights strategic projects, such as an operational effectiveness framework, to increase consistency across examinations and deepen collaboration with other SEC divisions.
Investment Advisers
Expanded Focus on Conflicts of Interest: The 2026 priorities detail specific business practices that may create additional risks, such as dual registration, use of third parties to access client accounts, and mergers or acquisitions of advisory practices.
Complex and Alternative Investments: Greater scrutiny of advisers recommending alternative investments, complex ETFs, and products with higher costs.
Private Funds: Enhanced focus on advisers to private funds, especially those newly advising such funds, with attention to regulatory awareness, liquidity, valuation, fees, disclosures, and differential treatment of investors.
Investment Companies
Names Rule Compliance: The 2026 priorities reference the amended fund “Names Rule,” broadening requirements for funds to invest in accordance with their names and enhancing disclosure and reporting.
Broker-Dealers
Operational Resiliency: Expanded review of operational resiliency programs, including supervision of third-party/vendor services and change management.
Prime Brokerage and Cash Sweep Programs: New focus on issues of concentration, liquidity, and counterparty credit risks in these areas.
Trading Practices: Continued focus on best execution, pricing and valuation of illiquid instruments, and disclosures regarding order routing and execution.
Transfer Agents and Funding Portals
Regulation S-P Amendments: The 2026 priorities highlight examination for compliance with the 2024 amendments to Regulation S-P, including requirements for incident response programs and expanded safeguards for customer information.
Cybersecurity and Information Security
AI and Polymorphic Malware: The 2026 document specifically calls out new risks associated with artificial intelligence and polymorphic malware, with a focus on how firms operationalize threat intelligence.
Incident Response Programs: Increased engagement with firms regarding their progress in preparing incident response programs in line with Regulation S-P amendments.
Emerging Financial Technology
AI Supervision and Monitoring: Examiners will zero in on how firms use AI, especially for fraud prevention, AML, back-office operations, and trading. They will assess whether firms properly disclose their AI capabilities, whether internal policies and controls are adequate, and whether firms monitor misuse or errors. This approach recognizes technology not as a target, but how it’s used.
Anti-Money Laundering (AML)
Omnibus Accounts: The 2026 priorities specifically mention risks associated with omnibus accounts maintained for foreign financial institutions.
How We Can Help
With evolving regulatory oversight, keeping your organization’s compliance posture current is more important than ever. The CBIZ team supports investment advisers, private funds, and other market participants in navigating these changing requirements. We have the experience and resources to help you stay on course and confidently meet regulatory expectations. Connect with us today.
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