SEC Announces 2026 Examination Priorities

On November 17, 2025, the SEC Division of Examinations (the “Division”) issued its annual Examination Priorities (“Exam Priorities”) for fiscal year[1] 2026. Exam Priorities outline the key areas where the SEC intends to focus its oversight in the coming year, including heightened attention to cybersecurity, operational controls, and core investment adviser compliance obligations.[2]

Key Areas of Focus for Investment Advisers (“IA”)

Fiduciary standards, specifically the duty of care and loyalty, remain central when serving retail investors.[3] The Division intends to review whether IAs remain consistent with these standards when providing full and accurate disclosures relating to:

• conflicts of interest,
• fee transparency, and
• best execution.[4]

The Division will pay particular attention to advisers offering alternative and complex investment products, including:

• private funds, private credit, illiquid strategies,
• exchanged traded funds (“ETFs”), option-based ETFs,
• products that have high commission and investment expenses.[5]

Additional areas of heightened scrutiny include practices that present elevated conflict-of-interest risks, such as:

• Advisers who are dually registered as broker-dealers,
• Advisers utilizing 3^rd parties to access client information,
• Advisers who have undergone mergers or consolidations, and
• Advisers who adopted new lines of business.[6]

As in prior years, the Division will prioritize examinations of advisers that have never been examined, with particular emphasis on newly registered advisers.[7]

Key Areas of Focus for Broker-Dealers

For broker-dealers, the Division will continue to assess compliance with financial responsibility rules, with a specific focus on:

• operational resiliency programs,
• oversight of third-party/vendor- provided services, and  
• credit, market, and liquidity risk management controls.[8]

• best execution,
• pricing valuation of illiquid instruments, and
• disclosures regarding execution information. [9]

The Division will continue to evaluate retail sales practices, including compliance with Regulation Best Interest, with particular attention to:

• products and strategy recommendations,
• conflict identification and mitigation,
• policies and procedures for reviewing available alternatives, and
•  procedures for satisfying the Care Obligations.[10]

Products receiving heightened scrutiny include complex or tax-advantaged offerings such as:

• variable and registered index-linked annuities,
• ETFs that invest in illiquid assets,
• municipal securities,
• 529 Plans, and
• private placements.[11]

Cybersecurity

The Division continues to prioritize registrants’ information-security and operational-resiliency practices, especially given elevated risks from cyber-attacks, climate or weather events, and geopolitical instability.[12] Examiners will assess firms’ policies and procedures governing:

• data governance and infrastructure security,
• data-loss prevention,
• access controls, and
• incident-response plans, including readiness for ransomware and emerging threats such as AI-driven attacks or polymorphic malware.[13]

Special attention will be given to how firms utilize threat-intelligence, monitor third-party service providers and vendors, and integrate technology controls consistent with their disclosure to clients.[14]

Examination Letters

If you receive an examination letter and need help navigating through the process, our team is available to assist you. With offices in San Diego, Irvine, Los Angeles, San Francisco, and New York, Shustak Reynolds & Partners, P.C. represents:

• Investment advisers,
• Broker-dealers,
• Registered representatives, and
• High-net-worth investors.

We are prepared to help our clients understand and navigate these changes with strategic advice and robust legal representation.

Shustak Reynolds & Partners, P.C. focuses its practice on securities and financial services law and complex business disputes.
We represent many investment advisors, financial professionals, broker-dealers, registered representatives,investors and businesses.
Attorney Robert R. Boeche can be reached in the firm’s San Diego office at (619) 696-9500.

[1] The SEC’s fiscal year runs from October 1 to September 30.

[2] See Fiscal Year 2026 Examination Priorities (SEC.gov).

[10] Id. The Care Obligations require broker-dealers act with reasonable care, diligence, and skill when marking recommendations. This includes having a reasonable belief the recommendation is in the best interest of the customer.