Summary

Situation Overview: The Securities and Exchange Commission’s (SEC) Division of Examinations (Division) released its 2026 examination priorities for Security-Based Swap Dealers (SBSDs) and, for the first time, examinations for Security-Based Swap Execution Facilities (SBSEFs).

What:  The Division will emphasize compliance with trade reporting, capital and margin requirements, segregation obligations, risk management practices, and timely remediation of issues identified in prior exams. SBSEFs examinations will be focused rule book implementation, related policies and procedures and operational risk controls.

Who: SBSDs and SBSEFs.

In Depth

The Division publishes its annual examination priorities to provide transparency to registrants and investors about the topics it plans to focus on in the new fiscal year and to encourage firms to direct their compliance efforts on areas of potentially higher risk. The Division released its 2026 examination priorities on Monday, November 11.

The annual publication discussed expectations regarding SBSD and SBSEF examinations for the upcoming year. The Division will begin conducting examinations of SBSEFs as a result of recent registrations under Regulation SE.

The examination priorities for SBSDs are generally in line with last year’s with an emphasis on the obligations for SBSDs to accurately report transactions under Regulation SBSR.[1] The SEC recently extended time-limited “no-action” relief regarding compliance with certain provisions of Regulation SBSR, permitting market participants to follow the Commodity Futures Trading Commission’s (CFTC) swap reporting rules for comparable transactions without facing SEC enforcement action. The Division highlighted that “accurate and complete” reporting is “crucial” for market transparency. The Division will continue to focus on SBSDs’ compliance with capital, margin, and segregation requirements. The Division also highlighted its expectation that past examinations findings have been remediated.

The Division expects to begin conducting examinations of registered SBSEF focusing on the SBSEF’s rules and related internal policies and procedures addressing trade monitoring, trade processing, and participation, as well as programs to identify and minimize sources of operational risk.

Compared to those in 2025, the 2026 priorities generally maintain continuity across core SBSD obligations. The 2025 priorities placed additional emphasis on substituted compliance for non-U.S. SBSDs and the sufficiency of policies and procedures, aligning closely with themes from the SEC’s January 2024 Risk Alert. In 2026, however, the SEC signals deeper scrutiny of data quality and SBSR reporting completeness and expands its supervisory scope to include SBSEFs.

Read the full priorities document at SEC.gov

Summary Table: 2025 v. 2026 Priorities

To learn more or discuss how Patomak can support your firm, please contact Sudhir Jain at sjain@patomak.com, Anne Montminy at amontminy@patomak.com, and Petar Lovric at plovric@patomak.com.

[1] This relief, originally set to expire on November 8, 2025, has been extended until November 5, 2029. https://www.govinfo.gov/content/pkg/FR-2025-04-24/pdf/2025-06920.pdf