SEC Division of Examinations Unveils 2026 Priorities: AI, Fiduciary Duties, Information Security

Providing transparency to firms and investors about the topics of focus for the upcoming fiscal year, the U.S. Securities and Exchange Commission’s Division of Examinations released its 2026 examination priorities, detailing the key risk areas and compliance programs that will be scrutinized across the financial services industry.

“Examinations are an important component to accomplishing the agency’s mission, but they should not be a ‘gotcha’ exercise,” said Paul S. Atkins, SEC chairman. The “release of examination priorities should enable firms to prepare to have a constructive dialogue with SEC examiners and provide transparency into the priorities of the agency’s most public-facing division.”

The division examines SEC-registered investment advisers, investment companies, broker-dealers, clearing agencies, and self-regulatory organizations, among others, for compliance with federal securities laws. The annual publication of the examination priorities furthers the SEC’s mission and aligns with the division’s four pillars: to promote and improve compliance, prevent fraud, monitor risk, and inform policy.

The 2026 priorities, as summarized below, reveal a significant focus on artificial intelligence – though no mention of crypto – and heightened vigilance over advisers serving retail and retirement investors, particularly regarding conflicts of interest.

Artificial Intelligence

Examinations prioritizing AI and automated tools will assess:

• AI representations: Reviewing for the accuracy of a registrant’s representations regarding its AI capabilities;
• AI supervision: Whether firms have implemented adequate policies and procedures to monitor and supervise their use of AI technologies in areas such as fraud prevention, anti-money laundering, or AML, and trading functions; and
• Automated advice: Whether advice or recommendations resulting from automated tools and algorithms are consistent with disclosures and the investors’ profiles, particularly for retail and older investors.

Notably absent from the section on AI and other technologies is any mention of digital assets, crypto, virtual currency, or blockchain. Crypto is not listed as a standalone risk in the coming year’s priorities or discussed as an affiliated risk in sections about fintech or AML. This is a significant departure from the SEC’s approach in 2024 and 2025 although to be expected given Chair Atkins’ previously stated remarks on the topic since helming the agency.

Fiduciary Standards of Conduct

Adherence to the fiduciary standards of conduct, encompassing both the duty of care and duty of loyalty, remains a top priority for investment advisers, especially those serving retail investors.

Examinations will review advice and disclosures for consistency with these obligations, emphasizing on: financial conflicts of interest; reviewing advisers’ efforts to seek best execution with the goal of maximizing value for clients; scrutinizing recommendations related to complex investments such as alternative investments, certain ETFs, and products with higher associated costs; vulnerable investors, emphasizing recommendations made to older investors and those saving for retirement; and focusing on advisers to newly launched private funds and advisers new to the private fund space, reviewing issues like liquidity, fees, and valuation.

The SEC division will also prioritize examinations of never-examined advisers and recently registered advisers.

Operational Resiliency and Cybersecurity

Cybersecurity remains a “perennial examination priority” due to elevated risks from cyberattacks, geopolitical concerns, and dispersed operations.

The SEC division will review firms’ operational resiliency and information security practices, including:

• Engaging firms about their progress in preparing incident response programs, which are required under the 2024 amendments to Regulation S-P, and which are designed to detect, respond to, and recover from unauthorized access to customer information;
• Training and security controls firms used to identify and mitigate new risks associated with AI and polymorphic malware attacks; and
• Assessing the development and implementation of written Identity Theft Prevention Programs designed to detect, prevent, and mitigate identity theft in connection with covered accounts.

Broker-Dealers and Investment Companies

For broker-dealers, examinations will continue to review sales practices related to Regulation Best Interest, or Reg BI, particularly regarding account and rollover recommendations. Focus areas include: recommendations of complex or illiquid products such as non-traded real estate investment trusts and private credit ETFs; and compliance with the net capital rule and the customer protection rule, including the assessment of credit, market, and liquidity risk management controls.

For registered investment companies, the division will prioritize compliance with the amended fund “names rule,” which broadens the requirement for funds to invest at least 80% of their assets in accordance with the investment focus suggested by their name. Exams will also cover fund fees, expenses, and certain companies that use complex strategies or have significant holdings of less liquid investments.

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