US investment managers are discovering that 2026’s regulatory landscape offers no shortcuts, even as the SEC signals a more targeted approach to enforcement. The appointment of chair Paul Atkins at the SEC has led some in the industry to assume a lighter regulatory touch is coming.
According to Leo RegTech, that assumption is being challenged by practitioners, who note that while examination resources are shifting toward fraud and direct investor harm, smaller average fines do not mean reduced scrutiny.
Leo RegTech recently discussed the compliance platform imperative of why investment managers can’t afford to wing it.
The SEC’s Division of Examinations continues to prioritise retail investor protection, RIAs’ fiduciary obligations and the overall effectiveness of compliance programmes.
The Division’s fiscal year 2026 priorities, released in November 2025, single out marketing, valuation, trading, portfolio management, disclosure and filings, and custody as core focus areas for investment advisers, investment companies and broker-dealers.
Conflicts of interest, cybersecurity, due diligence and compliance with the newly amended Regulation S-P also feature prominently. Examiners are additionally scrutinising AI governance, requiring firms to prove that AI tools claimed to support portfolio management genuinely influence investment decisions rather than functioning as background research.
Regulation S-P’s amended data security and privacy rules represent one of the sector’s most pressing deadlines. Large firms with over $1.5bn in assets under management were required to comply from 3 December 2025, with smaller firms facing a 3 June 2026 deadline. Firms must maintain accessible documentation covering incident-response programmes, risk assessments, breach logs and vendor-oversight records, all available on short notice for SEC examination. Policies stored informally across shared drives or email threads are unlikely to satisfy examiners.
The CFTC adds a further compliance layer for managers with commodity interest exposure. Entities relying on CPO exemptions under CFTC Rule 4.13 or CTA exemptions under Rule 4.14 must complete annual affirmations through the NFA’s Exemptions Filing System, with missed deadlines triggering automatic withdrawal of exemptions. Separately, a CFTC no-action letter issued in December 2025 allows many SEC-registered private fund managers to opt out of CFTC registration as commodity pool operators and trading advisers, though firms relying on this relief must maintain supporting documentation.
Across the SEC, FINRA and CFTC, the consistent message is that compliance programmes must be demonstrably effective, not simply documented on paper. Regulators are increasingly examining whether firms have systems capable of monitoring, detecting, escalating and recording issues in real time.
Read the full Leo RegTech post here.
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