The Securities and Exchange Commission’s Division of Examinations has identified artificial intelligence and cybersecurity as significant areas of focus in its 2026 Examination Priorities. The Division will review the use of AI technologies, automated investment tools, trading algorithms and other emerging technologies by SEC-registered firms. In particular, examiners will assess whether firms’ representations regarding their AI capabilities are accurate and whether firms have adequate policies and procedures to monitor and supervise their use of AI. The Division specifically identified the use of AI in areas such as fraud prevention and detection, back-office operations, anti-money laundering and trading functions as potential areas of review.
Cybersecurity and operational resiliency also remain important examination priorities. The SEC indicated that examiners will review firms’ governance practices, data loss prevention measures, access controls, account management procedures and responses to cybersecurity incidents, including ransomware attacks. Examiners will also consider the training and security controls firms use to address emerging risks associated with AI and other evolving cyber threats.
The 2026 priorities reflect the SEC’s increasing attention to the risks associated with the use of AI and other emerging technologies in the financial industry. For regulated firms, the priorities provide an opportunity to review existing compliance programs and determine whether policies, procedures and internal controls appropriately address how AI is being used within the organization. Firms should also consider whether statements concerning their AI capabilities accurately reflect their actual practices and whether cybersecurity, incident response and vendor oversight procedures remain appropriate in light of evolving technological risks. Although the Examination Priorities do not create new legal requirements, they provide important insight into the areas the SEC’s Division of Examinations intends to scrutinize during examinations.
If you need more information on this topic, please contact us at info@mnklawyers.com.
This material is provided for informational purposes only. It is not intended to constitute legal advice, nor does it create a client-lawyer relationship between MNK Law and any recipient. Recipients should consult with counsel before taking any actions based on the information contained within this material.