SEC turns focus to core adviser responsibilities ahead of digital asset regulation shift

No need to bring a crib sheet: the U.S. Securities and Exchange Commission’s Division of Examinations has signalled the areas it will put under the microscope in fiscal 2026, and the priorities , published on November 17 , point squarely at core adviser responsibilities rather than a renewed, broad crackdown on digital assets.

According to the original report from the Division of Examinations, the 2026 priorities are intended to provide transparency into the Division’s focus and to foster constructive dialogue with registrants. For SEC‑registered investment advisers, the guidance retains familiar themes , adherence to fiduciary standards, robust compliance programmes, and operational resilience , while sharpening scrutiny in several specific areas.

Fiduciary duty and advice quality
The Division will evaluate whether advisers meet duties of care and loyalty by assessing the substance of investment advice and the adequacy of client disclosures. Examiners will probe how firms identify and manage conflicts of interest, whether advisers consider cost alongside an investment’s objectives, liquidity, risks, volatility and exit costs, and whether they seek best execution to maximise client value. The Division explicitly flagged alternative and complex investments, higher‑cost products, recommendations to older and retirement‑focused investors, and products sensitive to market volatility as focal points.

The Division will also target advisers with particular business models or recent changes: those advising both private funds and separately managed accounts, newly launched private funds or advisers that have not previously advised private funds, dually registered broker‑dealers/advisers, firms using third parties to access client assets and data, and advisers that have grown through mergers. The guidance echoes law‑firm and industry analyses noting that examiners often prioritise recently registered or never‑examined advisers.

Compliance programmes under test
Examiners will test whether advisers’ compliance frameworks are comprehensive, implemented and enforced. Core areas include marketing and disclosure practices (with continuing scrutiny of substantiation for material claims, use of hypothetical performance, testimonials and third‑party ratings), valuation, trading and custody. Industry observers have stressed the Division’s renewed emphasis on marketing rule compliance and related books and records.

Information security, incident response and data privacy
Cybersecurity and operational resilience remain high on the agenda. The Division said it will review governance, data‑loss prevention, access controls, account management, and the adequacy of responses to and recovery from cyber incidents. It will assess compliance with Regulations S‑ID and S‑P where applicable, focusing on written Identity Theft Prevention Programs and whether they are reasonably designed to identify red flags, particularly during account takeovers and fraudulent transfers.

The Division emphasised the upcoming compliance timelines for the amended Regulation S‑P and said it will test for compliance in examinations after the applicable dates. Advisers should note the compliance deadlines: December 3, 2025, for larger advisers and June 3, 2026, for smaller advisers. The guidance urges firms to develop written incident response programmes reasonably designed to detect, respond to, and recover from unauthorised access to customer information, and to include procedures for timely notification to affected individuals where required.

Emerging technology and artificial intelligence
Recognising the growing use of automated decision tools and artificial intelligence, the Division will examine whether representations about technology are fair and accurate, whether operations and controls align with investor disclosures, and whether investment decisions are consistent with clients’ profiles. The Division will scrutinise governance, human oversight, monitoring, and training around AI, and will evaluate claims about AI in public statements. Industry analyses point to expectations that examiners will require firms to demonstrate a disciplined framework for AI use, including oversight and testing to ensure investor protection.

A narrower crypto emphasis
Notably, the 2026 priorities de‑emphasise crypto as a standalone focus compared with prior years. Reuters and other reporting have characterised the shift as reflective of the current regulatory and political environment; the Division’s guidance instead reorients attention to fiduciary and operational risks that affect a broad swathe of advisers.

The tone from the top
“Examinations are an important component to accomplishing the agency’s mission,” said SEC Chairman Paul S. Atkins, “but they should not be a ‘gotcha’ exercise.” The Division framed the priorities as a tool to help firms prepare for constructive engagement with examiners rather than as a checklist for enforcement alone.

Practical implications
Industry counsel and compliance advisers responding to the priorities have advised firms to review and, where necessary, strengthen disclosure practices, valuation and custody controls, marketing substantiation, and cybersecurity incident‑response playbooks. Firms employing AI or automated decisioning should document governance, human oversight and testing. Advisers subject to the Regulation S‑P amendments should ensure written incident response programmes are adopted by the stated compliance dates and be prepared for the Division to test those programmes in future examinations.

While the priorities are not exhaustive, they signal a sustained examiner focus on fundamentals , fiduciary obligation, programme effectiveness and information security , even as the regulatory landscape for digital assets evolves. Industry data and law‑firm analyses suggest firms that shore up governance, document decision‑making and maintain clear, accurate client disclosures will be better positioned both to serve clients and to manage the risk of adverse examination findings.