Securities Regulation Daily Wrap Up, VITAL BRIEFING—Three things to know about the SEC’s FY26 examinations priorities statement, (Nov 18, 2025)
The FY26 priorities published by the SEC’s Division of Examinations omit explicit references to crypto, but they do address emerging technologies such as AI.
The SEC’s Division of Examinations has released its FY26 exam priorities statement. While the statement does not mention crypto expressly, it does suggest a focus on alternative investments. Both topics are of interest for the Trump Administration, which has sought to provide rules of the road on crypto and to expand retail investors’ access to alternative investments. Also, activist investment advisors’ filings with the Commission may see new scrutiny under the division’s FY26 priorities as may firms’ use of emerging technologies like artificial intelligence (AI) automate certain tasks.
SEC Chair Paul S. Atkins issued a brief statement via press release indicating that the Division of Examinations’s FY26 priorities would allow firms to engage with SEC staff. However, Atkins cautioned that “[e]xaminations are an important component to accomplishing the agency’s mission, but they should not be a ‘gotcha’ exercise.”
The Examinations Division said that while it remains focused on its Four Pillars of compliance, fraud prevention, information gathering for policy purposes, and risk monitoring, the division has fewer resources and would reevaluate its risk-based approach regarding market trends and new and emerging products and services.
“In this increasingly complex and changing financial and regulatory environment, we strive to improve compliance in a way that that is both transparent and practical,” said Keith Cassidy, Acting Director of the Division of Examinations.
Crypto. The Division of Examinations notably did not mention crypto or blockchain activities by name. In numerous previous statements spanning nearly a decade the division noted in some years that it would mull firms’ custody, controls, safeguards, portfolio management of digital assets, and risk disclosure to investors. The omission of crypto from the most recent priorities statement may reflect the Trump Administration’s embrace of crypto markets.
Artificial intelligence. The division’s FY26 priorities do, however, emphasize technologies, such as artificial intelligence (AI) that can automate certain tasks. “The Division remains focused on registrants’ use of certain products and services, such as automated investment tools, AI technologies, and trading algorithms or platforms, and the risks associated with the use of emerging technologies and alternative sources of data,” said the division’s priority statement.
Review of AI tools, said the division, may focus on whether firms have adequate policies and procedures to supervise their use of AI. The division also noted that reviews may consider the use of regulatory technology to automate internal processes.
Other market participants. At a time when the Trump Administration is promoting access to alternative assets for retail investors, the division appears to be focusing on certain types of these assets. That focus incudes advisers’ practices regarding private credit and private funds with extended lock-up periods, complex exchange traded funds (ETFs), and other investments that have higher costs when compared to other similar investments.
The anticipated focus on investment advisers also may include closer scrutiny of activist engagements. Here, the priorities statement said the division would consider whether advisers made timely and accurate filings on Schedules 13D and 13G, Form 13F, Form 3, Form 4, Form 5, and Form N-PX.
In the case of broker-dealers, the division’s focus appears to include compliance with Regulation Best Interest, including recommendations about products, conflicts of interest, and compliance with the care obligation.
The recent amendments to Regulation S-P also appear to be a focus for the division. Here, the priority statement said the division “will” consider these issues regarding transfer agents. The division also said it “may” extend this focus to funding portals.
Looking ahead. While some topics, such as crypto, may not be explicitly mentioned in the FY26 exam priorities, issues related to crypto, or any type of investment, can arise in other settings. The omission of any express mentions of crypto would align with the Trump Administration’s push to issue rules of the road for crypto, with enacted legislation that regulates payment stablecoins, and potentially with yet to be enacted legislation to divide crypto regulatory duties between the SEC and the CFTC.
Moreover, even though crypto may not be featured, financial technology more broadly still is featured in the FY26 priorities. That means that firms likely will need to ensure that they can sufficiently document how they use AI to automate their operations.
Finally, the FY26 priorities suggest that advisers will need to carefully review their filings, especially if they engage in activist-related activities. Here, the priorities of the Division of Examinations would appear to dovetail with guidance issued earlier this year by the SEC’s Division of Corporation Finance that appeared to curb some environmental, social and governance (ESG) engagements with public companies (See Staff Legal Bulletin No. 14M (prior coverage in Securities Regulation Daily); statement on shareholder proposals for the current proxy season (limiting reviews to mostly state law issues); and Compliance and Disclosure Interpretations regarding Exchange Act Sections 13(d) and 13(g) and Regulation 13D-G Beneficial Ownership Reporting, Question 103.12).
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