Regulatory Update November 2025 – US Region: SEC 2026 Examination Priorities in Focus

The Division will maintain a strong focus on investment advisers, emphasizing fiduciary duty and loyalty obligations, particularly when serving retail investors. Examinations will closely review recommendations involving complex or high-cost products, advisers to private funds, and dual registrants. Newly registered advisers and those that have never been examined will also receive increased attention. Advisers that have recently merged or undergone structural changes will be prioritized to ensure compliance programs remain effective during transitions.

Examinations will also assess conflicts of interest related to compensation structures, account allocation practices, and account selection practices, with particular scrutiny on dual registrants where advisory and brokerage activities may create incentives that disadvantage clients. Reviews will evaluate whether dual registrants appropriately disclose and mitigate conflicts arising from recommending brokerage accounts over advisory accounts, or vice versa, based on compensation differences.

Examinations will pay close attention to recommendations involving:

• Complex ETFs, such as leveraged, inverse, or option-based ETFs
• Alternative investments, including private credit and private funds with extended lock-up periods
• High-cost products with elevated commissions or expenses
• Crypto assets and structured products for suitability, disclosure practices, and risk management.

Compliance programs remain a core area of scrutiny. The SEC will assess the effectiveness of advisers’ compliance frameworks, including marketing practices, valuation methodologies, custody arrangements, and annual reviews. Custody rule compliance will be a particular focus, especially for advisers managing alternative investments or private funds. Firms integrating new technologies, including artificial intelligence, must ensure policies and disclosures adequately address associated risks.

Investment companies will be examined for fund fees, expense waivers, and portfolio management practices. A significant priority for 2026 is compliance with the updated Names Rule under the Investment Company Act, which requires accurate and transparent naming conventions. Funds employing complex or illiquid strategies will be subject to heightened review to ensure proper risk management and disclosure.

Broker-dealers will see continued focus on financial responsibility rules, operational resiliency, and liquidity risk management. Trading practices, including extended hours and municipal securities, will be monitored closely. Sales practices under Regulation Best Interest remain a key priority, particularly regarding rollover recommendations and advice provided to older investors. Reviews will include conflicts arising from compensation arrangements and recommendations influenced by economic incentives, with a focus on transparency and compliance.

The SEC will continue oversight of clearing agencies, municipal advisors, transfer agents, security-based swap dealers (SBSDs), security-based swap execution facilities (SBSEFs), and funding portals. Oversight will also include national securities exchanges and FINRA, focusing on governance, compliance programs, and operational resiliency.

Across all market participants, the Division will prioritize cybersecurity and compliance with Regulation S-P and Regulation S-ID, reflecting the growing importance of data protection and identity safeguards. Emerging financial technologies, including artificial intelligence and digital platforms, will be examined for associated risks. Regulation Systems Compliance and Integrity (SCI) compliance will be emphasized to ensure systems integrity, alongside operational resiliency and vendor oversight.

Compared to last year’s focus areas, the 2026 examination priorities highlight several notable shifts that firms should be aware of as they plan and refine their compliance programs, including:

• Compliance with the 2024 amendments to Regulation S-P is now a major focus
• Enhanced attention to the Names Rule under the Investment Company Act
• Broker-dealer oversight expands to include operational resiliency and liquidity risk management
• Technology-related priorities broaden to cover systems integrity under Regulation SCI
• Preparedness for the shortened settlement cycle (T+1), which featured prominently in 2025, is not listed for 2026
• Anti-Money Laundering, explicitly highlighted last year, does not appear as a standalone priority
• Private fund advisers remain a focus, with deeper examinations into interfund transfers, preferential treatment (including side letters), affiliated service providers, and fee and expense allocation practices.

Read the press release here.

To translate regulatory priorities into day‑to‑day action, firms can use this checklist as a practical guide for strengthening compliance programs and preparing for upcoming examinations.

• Update compliance programs to ensure robust controls around marketing, valuation, custody, and annual reviews.
• Review cybersecurity protocols for alignment with Regulation S-P amendments, including vendor oversight and identity safeguards.
• Prepare for Names Rule compliance by auditing fund naming conventions and related disclosures.
• Evaluate operational resiliency plans, including Regulation SCI compliance and vendor oversight.
• Verify custody rule compliance, especially for alternative investments and private funds.
• Conduct gap analyses for private fund advisers, focusing on interfund transfers, preferential treatment (including side letters), affiliated service providers, and fee/expense allocation.
• Confirm Regulation Best Interest compliance for broker-dealers, including rollover recommendations and municipal securities disclosures.
• Review disclosures for complex ETFs, structured products, and alternative investments to ensure accuracy and transparency.