LOOKING AHEAD IN 2026: PRIORITIES OF THE SEC

On November 17, 2025, the Securities and Exchange Commission’s (“SEC”) Division of Examinations (the “Division”) released its fiscal year 2026 examination priorities (the “Report”) reflecting practices, products and services the Division believes present potentially heightened risks to investors or integrity to the U.S. capital markets. These priorities continue 2025’s focus on fiduciary standards of conduct, effectiveness of advisers’ compliance programs, never examined and recently registered advisers, and adherence to new and amended rules. However, unlike the 2025 report, crypto assets and examination of private fund advisers are not listed as a focus with standalone sections.  Notably, the Report represents the first list of priorities released under Chairman Paul Atkins and the Division acknowledges that it is operating under fewer resources. Below is a summary of the Report and what to expect moving forward into 2026.

1. Investment Advisers
   The SEC’s first priority focuses on investment advisers and their adherence to fiduciary standards of care and the effectiveness of their compliance programs. Pursuant to such focus, the Division plans to review advice and disclosures especially as related to financial conflicts of interest and factors underlying investment advice. The Division indicated that alternative investments such as private credit and private funds with long lock-up periods, complex investments such as exchange traded funds (“ETF”) wrappers and option based ETFs, and products that have higher costs associated with investing would be areas of focus.
2. Investment Companies
   The SEC intends to continue prioritizing examinations of registered investment company (“RIC”), particularly due to their importance to investors saving for retirement. Particular areas of focus include fund fees and expenses and portfolio management practices and disclosures. Developing areas of interest include RICs that participate in mergers and similar transactions, RICs that use complex strategies and/or have less liquid investments, and RICs with novel investment strategies.
3. Broker Dealers
   Compliance with the net capital rule, the consumer protection rule, and related internal processes, procedures, and controls continue to be an area of focus for the Division. Other areas of focus include broker-dealer equity and fixed income trading practices, routing and execution of orders, sales practices, and product recommendations that are complex or tax advantaged.
4. Clearing Agencies
   The SEC intends to examine each clearing agency at least once, just as it has in prior years. The Division indicates that examinations intend to focus on core risks, processes, and controls. For clearing agencies not covered by Title VIII of the Dodd-Frank Act, the Division intends to conduct risk based examinations.
5. Risk Areas Affecting Various Market Participants
   The key risk areas the Division intends to focus on are: (a) information security and operational resiliency, (b) emerging financial technology, (c) regulation system compliance and integrity (SCI), and (d) money laundering.

   
   Private Funds

   Although private fund advisers do not have a standalone section in this year’s Report, the listed priorities still incorporate considerations relevant to private funds throughout several sections. Focuses such as alternative investments (including those involving private credit or with extended lock up periods), management conflicts where advisers manage both private funds and separately managed accounts, and complex investments such as ETF wrappers and option based ETFs, may reflect that such issues could be general compliance matters of interest. Because of this, private fund advisers may receive inquiries on these focus areas.

   Takeaways

   The Report serves as a critical roadmap for navigating the SEC’s regulatory priorities in 2026. While not exhaustive, it signals where the Division will concentrate its resources and what practices will draw heightened scrutiny. Investment advisers, broker-dealers, and investment funds should treat this as a call to action and conduct thorough internal reviews of their compliance programs, stress-test their policies and procedures against these priorities, and proactively address any gaps before examinations begin. With the Division operating under tighter resource constraints and new leadership at the helm, firms that demonstrate robust compliance frameworks aligned with these priorities will be best positioned to withstand regulatory scrutiny and protect their clients’ interests in the year ahead.