SEC shifts focus for 2026, easing crypto scrutiny in favour of cybersecurity and AI oversight

The U.S. Securities and Exchange Commission’s (SEC) Division of Examinations has released its examination priorities for fiscal year 2026, heralding a recalibration of regulatory focus that balances continuity with a notable shift away from the intense scrutiny of crypto assets seen in prior years. According to SEC announcements and analyses from legal and financial experts, this agenda is designed less as a punitive measure and more as a strategic framework to foster dialogue with industry participants and encourage proactive compliance enhancements.

A core emphasis for 2026 remains investment advisers, where the SEC will intensify its longstanding focus on fiduciary duties, particularly the duties of care and loyalty owed to clients. Examiners will delve deeply into how advisers manage conflicts of interest, assess compliance programme effectiveness, and scrutinise advice and disclosures relating to investment costs, time horizons, risks, and product volatility. Retail investors, especially those with retirement accounts, will see heightened protection efforts. Special attention is being paid to newer advisers and firms that have not undergone recent reviews, with the SEC aiming to embed disciplined compliance cultures early. Alternative investments, private credit strategies, and private funds with extended lock-up periods remain key areas of concern given their complexity and risk profiles.

Registered investment companies, including mutual funds and ETFs, will undergo thorough examination as well, with a focus on compliance with disclosures, governance, and filings such as summary prospectuses. The SEC will watch funds engaged in mergers, those employing complex or less liquid strategies, and those with leveraged or novel structures, underscoring the importance of safeguarding retail investors, many of whom rely on these vehicles for retirement savings.

Broker-dealers face rigorous scrutiny on several fronts, including adherence to financial responsibility rules like the Net Capital and Customer Protection Rules, trading practices, and retail sales conduct. Examiners will assess internal controls, liquidity management, and counterparty risk, alongside trading-related practices such as equity and fixed-income execution, extended-hours trading, best execution requirements, and compliance with Regulation NMS and SHO provisions. In retail sales, the focus will be on recommendations aligned with Regulation Best Interest, including suitability reviews for complex products, conflict mitigation measures, and disclosure clarity in Form CRS about services, fees, and conflicts.

Cross-cutting risks are prominent in the examination agenda, especially cybersecurity and operational resiliency. The SEC will concentrate on governance frameworks, access controls, data-loss prevention, incident response, and recovery plans, assessing firms’ readiness against advanced cyber threats like polymorphic malware. A noteworthy enhancement to the SEC’s oversight is the increased focus on the use of automated tools and artificial intelligence (AI) in investment advice and operations. The Division will scrutinise whether firms’ disclosures about these technologies are fair and accurate, whether algorithmic operations align with public representations, and whether the investor profiles are properly considered in AI-driven advice. This reinforces a technology-neutral approach to regulation that prioritises safeguarding investors and maintaining market integrity over targeting specific asset classes or technologies.

Arguably the most headline-grabbing development in the 2026 priorities is the complete omission of cryptocurrency and digital assets from explicit focus areas. Unlike previous years where crypto was distinctly marked as a key risk for examination, this shift suggests the SEC now views crypto-related matters through a broader, technology-neutral lens, integrating these risks within general cyber and operational risk frameworks. Reuters notes this move aligns with a regulatory environment that is comparatively more accommodating towards crypto under the current U.S. administration, contrasting with the stricter posture of prior years.

Industry legal experts underscore that the SEC’s 2026 agenda calls for demonstrable, documented, and tested compliance from registrants. Advisers are encouraged to refresh fiduciary analyses, especially concerning older and retirement investors, revisit valuation and fee practices for alternative investments, and ensure marketing claims are substantiated. Broker-dealers must review and bolster their Regulation Best Interest policies and disclosures, while all registrants should demonstrate readiness for updated Regulation S-P requirements focused on customer information safeguards and incident response.

This recalibrated agenda confirms the SEC’s enduring commitment to investor protection, market integrity, and operational resilience, while signalling a measured de-escalation in direct crypto oversight in favour of broader regulatory concerns. For market participants, including advisers, fund managers, and broker-dealers, the 2026 priorities represent an opportunity to reassess and enhance compliance frameworks, particularly in cybersecurity governance and the oversight of emerging technologies like AI. Firms seeking to navigate these evolving expectations would benefit from consulting experienced securities counsel to ensure preparedness for forthcoming examinations.

The full Fiscal Year 2026 Examination Priorities are available through the SEC’s official publications, offering detailed guidance for market participants preparing for heightened regulatory engagement in the coming year.