December has brought a range of activity at the SEC and beyond. From the SEC issuing its first enforcement press release in several months, filing multiple actions including one for alleged accounting and disclosure fraud, to US prosecutors announcing criminal action on a matter that first hit the news just in September. But a pair of regulatory releases by the SEC’s Division of Trading and Markets (TM) are also due attention. Our rundown of those releases follows in an area we are keeping watch.
Broker Dealers
SEC Division of Examinations Releases its List of What’s Hot & What’s Not for 2026
Consistent with recent years, early this fiscal year the SEC’s Division of Examinations (the “Examinations”) has released its 2026 examination priorities (“Priorities”). The Priorities signal a more engagement‑oriented program consistent with one of Chairman Atkins’ mantras, framing regulatory oversight and compliance as a two‑way conversation—not a “gotcha” exercise. In the prologue, Examinations leadership: (1) promises to share observations and deepen outreach with registrants and SROs, and to harmonize its work with that of the Commission’s various policy divisions and (2) underscores its plan for deploying limited resources to the highest risk areas for investors and market integrity. The second issue is a perennial one for the SEC but is particularly acute following the significant reduction in headcount the SEC has experienced in the past nine months. Notwithstanding agency changes, in our experience, the work of Exams has generally continued to proceed apace.
SIFMA Asks the SEC to Significantly Reduce Recordkeeping Obligations for Brokers and RIAs
When the SEC returned to its offices last week after the lengthy shutdown, it was greeted by a letter from SIFMA president Ken Bentsen, Jr. to Chair Atkins urging the Commission to “modernize” the communications and records-retention rules for broker-dealers, federally registered investment advisers, and security-based swap dealers. The letter was copied to each SEC Commissioner and Division Director, as well as to the President and Chief Legal Officer of FINRA.
First Circuit Limits SEC’s Reach on Investment Advisers
The First Circuit overturned an SEC win and disgorgement order against Commonwealth Equity Services for alleged violations of the Investment Advisers Act (“Advisers Act”). In a lengthy opinion, the court upheld traditional notions of materiality and rejected a “per se” rule for potential conflicts of interest, as well as finding related causation errors with the SEC’s disgorgement calculation.