SEC Examination Priorities 2026: Key Changes & Preparation Guide
WebCE Staff
By
December 15, 2025
Each year, the SEC’s Division of Examinations publishes its Examination Priorities to signal where examiners will focus their time and resources. For compliance teams, advisers, and broker-dealers, this document functions as an early-warning system for upcoming SEC examinations. On the surface, the Fiscal Year 2026 priorities look familiar, with fiduciary duty, cybersecurity, Reg BI, AML, and complex products all making repeat appearances.
But read closely, and the 2026 document is less about expansion and more about sharpening. With fewer resources and increasingly complex markets, the SEC is signaling that examinations will be more targeted, more analytical, and less forgiving of firms whose compliance programs exist only on paper, a theme echoed in the SEC’s official 2026 exam priorities announcement.
This article reviews the strategic implications of the 2026 Examinations Priorities, where risk is concentrating, and what firms should be preparing for now.
What’s New in the SEC Examination Priorities for 2026
While many core focus areas remain consistent with prior years, the 2026 Examination Priorities reflect a noticeable shift in how the SEC plans to execute exams. The emphasis is not on expanding coverage, but on tightening scrutiny in areas where investor harm and operational failure intersect.
Key changes include deeper testing of conflicts mitigation, heightened expectations around cybersecurity and incident response, and closer examination of AI-related representations and controls.
A Sharper, More Targeted SEC Exam Program in 2026
The Leadership Message sets the tone: the Division of Examinations is operating with fewer resources, reassessing how it deploys staff, and doubling down on risk-based oversight.
Translation: While unconfirmed, the Division’s resource constraints imply a trade-off: fewer exams, but deeper scrutiny. This suggests firms prepared for comprehensive audits may be better positioned to respond effectively to more limited-scope reviews.
The SEC also emphasizes transparency—sharing observations through Risk Alerts and outreach—suggesting that firms will have less room to claim surprise when deficiencies are cited.
Theme 1: Conflicts of Interest Remain a Central Driver of Exam Risk
Across investment advisers and broker-dealers, conflicts remain the single most consistent examination driver.
For advisers, the SEC will scrutinize adherence to fiduciary duties of care and loyalty, particularly where:
Financial incentives may bias advice
Higher-cost or complex products are recommended
Advice is provided to older investors or those saving for retirement
For broker-dealers, this focus continues under Regulation Best Interest, with attention on:
Account and rollover recommendations
Limited product menus
Compensation structures that influence recommendations
Processes for identifying and mitigating conflicts
What’s different in 2026: The priorities suggest that disclosure alone may be insufficient without demonstrating active mitigation. Examiners are increasingly focused on whether firms can demonstrate that conflicts are actively mitigated—or avoided altogether—through supervision, documentation, and decision-making controls.
What examiners are likely to ask:
How do you document the rationale for rollovers or account type recommendations?
How are conflicts identified at the point of recommendation, not after the fact?
How do supervisors test whether mitigation measures actually work?
Theme 2: Complex and Illiquid Products Remain a Retail Risk
The SEC continues to view complex and illiquid products as a heightened risk to retail investors. In 2026, examiners will pay close attention to recommendations involving:
Private credit and private funds with extended lock-ups
Option-based, leveraged, and inverse ETFs
ETFs wrapping less liquid strategies
Variable and registered index-linked annuities
Municipal securities, 529 plans, and structured products
For registered investment companies, the focus extends to:
Fees and expenses, including waivers and reimbursements
Portfolio management practices and consistency with disclosures
Compliance with the amended Fund Names Rule after its compliance date
The signal: if a product is difficult to explain, the guidance implies a heightened burden of proof regarding diligence and supervision.
What examiners are likely to ask:
How do you determine suitability for complex or illiquid products?
How do disclosures align with actual portfolio construction?
How do you supervise sales of higher-cost or volatility-sensitive products?
Theme 3: Compliance Programs Must Be Substantive, Not Just Procedural
Assessing the effectiveness of compliance programs remains a core examination function, but the emphasis in 2026 priorities signals a distinct shift: implementation appears to be weighted as heavily as documentation.
For advisers, examiners will evaluate whether compliance programs are reasonably designed and enforced across areas such as:
Marketing and advertising
Valuation and trading
Portfolio management
Custody
Disclosure and regulatory filings
Annual compliance reviews will be examined closely—not just whether they occurred, but whether they meaningfully assessed risks tied to the firm’s actual business model.
The SEC will also focus on advisers that:
Change business models
Begin advising new asset classes
Launch private funds for the first time
Merge with or acquire other advisory practices
What examiners are likely to ask:
How did your annual review identify and address real operational risks?
How are policies tailored to your products, clients, and compensation structures?
Can you show evidence that policies are followed and enforced?
Theme 4: Cybersecurity and Operational Resiliency Are Now Baseline Expectations
Cybersecurity remains a perennial priority, but in 2026 it is firmly treated as a governance issue, not merely a technology concern.
Examinations may focus on:
Data loss prevention and access controls
Incident response and recovery procedures
Ransomware preparedness
Vendor and third-party risk management
Training and governance related to cybersecurity
Special attention will be paid to firms’ preparedness for the amended Regulation S-P requirements, including written incident response programs and customer notification procedures. Compliance with Regulation S-ID’s identity theft prevention requirements will also be tested.
What’s new: the SEC explicitly calls out risks tied to artificial intelligence and polymorphic malware, signaling that firms must keep pace with evolving threat landscapes.
What examiners are likely to ask:
Do you have a tested incident response plan?
How do you oversee third-party vendors with access to customer data?
How are employees trained to identify and respond to cyber threats?
Theme 5: AI Representations Face Renewed Scrutiny
Emerging financial technology—particularly artificial intelligence—continues to draw regulatory scrutiny. In 2026, the SEC is less interested in whether firms use AI and more interested in how they supervise it.
Examinations will focus on:
Automated investment tools and recommendations
AI-driven trading or advisory systems
Accuracy of marketing claims about AI capabilities
Oversight and supervision of algorithms
Use of AI in AML, fraud detection, and operations
The risk: firms that overstate AI capabilities or fail to supervise automated tools may face findings for misleading disclosures or inadequate controls.
What examiners are likely to ask:
How do you validate AI-driven recommendations?
Who oversees model outputs and exceptions?
How do disclosures match actual system functionality?
Theme 6: Never-Examined and Newly Registered Firms Move to the Front of the Line
SEC exam focus for newly registered investment advisers and funds
As in prior years, the SEC will prioritize examinations of advisers and registered investment companies that have never been examined—especially those recently registered.
The stated objective is twofold:
Identify risks early
Encourage firms to build strong compliance programs from the outset
For newer firms, this means first exams are likely to be comprehensive and rigorous regarding basic deficiencies.
Common SEC Exam Preparation Themes Emerging for 2026
The 2026 Examination Priorities signal heightened scrutiny of check-the-box compliance. Practical steps worth considering include:
Reassess conflict mitigation, not just disclosure language
Pressure-test cybersecurity and incident response plans
Audit AI-related disclosures against actual controls and supervision
Review suitability and supervision frameworks for complex products
Ensure annual compliance reviews are risk-based and substantive
Prepare documentation early, especially for first-time exams
What Changed from the 2025 SEC Examination Priorities
Compared with 2025, the SEC’s 2026 priorities show several notable shifts in emphasis:
From disclosure to execution: In 2025, disclosures were a central focus. In 2026, examiners are more explicitly testing whether firms’ controls, supervision, and decision-making align with those disclosures.
Cybersecurity as governance: Cyber and operational resiliency were already priorities, but 2026 elevates them as firmwide governance responsibilities, reinforced by upcoming Regulation S‑P incident response requirements.
Sharper scrutiny of AI claims: While emerging technology appeared in prior years, 2026 places clearer emphasis on validating AI-related representations and supervising automated tools.
Increased pressure on first-time exams: The continued prioritization of never‑examined and recently registered firms is paired with higher expectations for baseline compliance maturity.
These changes signal a maturing exam program that is less tolerant of theoretical compliance and more focused on outcomes.
Final Takeaway
The SEC’s 2026 Examination Priorities are not about reinventing oversight—they’re about refining it. Firms that understand these priorities as risk signals, rather than a static checklist, will be better positioned to navigate exams with confidence.
In 2026, the implicit question driving these priorities appears to be: Do your controls work when it matters most?
A Practical Resource for Ongoing Compliance
For many firms, translating SEC examination priorities into day-to-day compliance decisions can be challenging—especially as expectations continue to evolve. The 2026 Examination Priorities are best used not as a one-time checklist, but as a reference point throughout the year to pressure-test controls, supervision, and governance practices against real exam risk.
Firms can use this guidance to:
Benchmark current policies against emerging exam focus areas
Identify gaps between written procedures and actual practice
Prioritize internal reviews based on where examiners are signaling deeper scrutiny
Prepare staff and supervisors for more targeted, analytical examinations
Because the Division of Examinations continues to emphasize transparency through Risk Alerts and outreach, firms that regularly revisit these priorities are better positioned to respond proactively—rather than reactively—when examination requests arrive.
Stay Aligned with Evolving SEC Exam Expectations
As SEC examination priorities continue to evolve, ongoing education plays an important role in helping firms translate regulatory guidance into practical compliance practices.
WebCE supports investment advisers, broker-dealers, and compliance professionals with continuing education and exam-focused resources designed to reinforce understanding of current regulatory expectations—including fiduciary obligations, Regulation Best Interest, cybersecurity, and emerging technology risks.
Using the SEC’s 2026 Examination Priorities as a reference point, firms can pair internal reviews with targeted education to help ensure teams stay informed, prepared, and aligned throughout the year.