The US SEC has set out its examination priorities for 2026, signalling that regulated firms should brace for more stringent oversight of their technology controls, data governance frameworks, and wider risk management practices.
The regulator’s latest update makes clear that supervisory expectations are rising as firms adopt more sophisticated tools, including artificial intelligence, across their operations, claims Red Oak.
Acting director of the division of examinations Keith Cassidy said that regulators are paying close attention to how advisers, broker-dealers and investment companies are navigating an “increasingly complex and changing financial and regulatory environment.”
A central focus for exam teams will be the strength of technology systems and the safeguards firms have in place to maintain operational resilience. Supervisors want to see clear evidence that firms are monitoring their systems, documenting potential vulnerabilities, and preparing adequately for cybersecurity incidents and vendor-related risks. With disruptive attacks and outages becoming more common, the SEC is increasing scrutiny of the processes designed to prevent, detect and respond to these threats.
Data protection remains high on the regulatory agenda. Firms are expected to show that they can secure customer information effectively, with strong governance around access controls and privacy safeguards. Examiners will review whether firms have implemented appropriate oversight mechanisms to ensure sensitive data is managed correctly across internal departments and third-party systems.
The regulator has also reaffirmed its interest in how firms address conflicts of interest, justify their fees and uphold their fiduciary duties. Reviews will place particular emphasis on whether client recommendations are being made in investors’ best interests, regardless of the business line or compensation structure involved.
Marketing activities, disclosures and public communications are set to face continued oversight, especially in areas involving environmental, social and governance (ESG) claims or complex investment strategies. Supervisors want to ensure that marketing materials are accurate and consistent, and that performance information is presented fairly.
The adoption of artificial intelligence and automated technologies is prompting further attention. Regulators want firms to demonstrate robust supervision of these tools, including detailed testing to verify they operate within regulatory expectations. Firms will also be expected to disclose clearly how their AI systems function, particularly where automated tools influence recommendations or client interactions.
Trading practices, best execution obligations and the oversight of high-risk or complex products will remain a core theme of upcoming exams. The SEC has indicated that retail investors, and the quality of the execution they receive, will be a key consideration.
Investment company governance will also be under the spotlight. Funds using complex strategies or managing liquidity risks should expect greater scrutiny of their portfolio oversight processes, governance practices and fee transparency.
Financial crime controls are another area where the regulator expects firms to demonstrate strong, documented procedures. AML frameworks must be tailored to each firm’s risk profile, supported by effective monitoring tools and complete reporting practices.
For firms preparing for these heightened expectations, technology designed to support compliance workflows is becoming increasingly important. Red Oak offers tools that centralise the creation, review and approval of marketing materials, maintain audit-ready documentation, apply AI-based review capabilities to disclosures and manage regulatory filings and policies with full transparency. By consolidating these functions, firms can reduce operational risk, strengthen oversight and improve their readiness ahead of future examinations. The company encourages firms to schedule a demo to see how its platform can support compliance teams operating in a fast-evolving regulatory landscape.
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