Dual registrant regulatory roundup - November 2026

SEC approves FINRA Rule 2210 amendments permitting projected performance and targeted returns

• On October 15, 2026, the SEC issued an order approving FINRA’s proposed amendments to Rule 2210 (Communications with the Public), which create a new exception to Rule 2210’s general prohibition on projecting performance. The amendments permit a member to project the performance of, or provide a targeted return with respect to, a security, a securities portfolio, or an asset allocation or other investment strategy, provided that the member: (1) adopts and implements written policies and procedures reasonably designed to ensure that the communication is relevant to the likely financial situation and investment objectives of the intended audience; (2) provides sufficient information for the intended audience to understand the criteria used and assumptions made in calculating the projection or target and the risks and limitations of using it in making investment decisions; and (3) maintains records concerning the source of the projected performance or targeted return for at least three years, the first two in an easily accessible place.
• The approved rule does not contain the originally proposed stand-alone “reasonable basis” requirement or the express requirement to disclose the “reasons why” a projection might differ from actual results, relying instead on Rule 2210’s general content standards. The exception does not extend to backtested, model, related, or extracted performance, and is generally not intended to apply to communications directed toward mass-audiences or general retail communications.
• For dual-registrants, the amendments narrow, but do not eliminate, the gap between Rule 2210 and the hypothetical performance provisions of the Advisers Act Marketing Rule (Rule 206(4)-1). FINRA has indicated that adviser-prepared materials that comply with the Marketing Rule will not necessarily satisfy amended Rule 2210, so firms should continue to review common marketing materials under both regimes. The order does not establish an effective date—FINRA will announce one in an upcoming Regulatory Notice.

SEC proposes crypto custody rules and broader custody reforms for investment advisers and regulated funds

• On October 1, 2026, the SEC proposed new rules and amendments under the Advisers Act and the Investment Company Act to provide a tailored framework for the custody of crypto assets by registered investment advisers and regulated funds (registered investment companies and business development companies). 
• The proposal would permit an adviser to self-custody client crypto assets that are “client funds or securities” where, before taking custody of each asset and at least quarterly thereafter, the adviser determines in writing that no permitted custodian will hold the asset (cost is not a valid basis). Self-custody would be subject to conditions including documented safeguarding expertise, private-key controls requiring approval by at least two designated persons (including a management person), client-specific blockchain addresses, annual cybersecurity risk assessments and reviews, an internal control report from an independent public accountant, and at least quarterly client statements. The proposal would also permit the use of qualifying state trust companies as custodians for crypto assets, subject to diligence, review, and segregation conditions.
• Beyond crypto assets, the proposal would affect all registered advisers. It would redesignate the Advisers Act custody rule (currently Rule 206(4)-2) as new Rule 223 1, eliminate the requirement that accountants performing pooled vehicle audits be PCAOB-registered and inspected, add exceptions for certain discretionary trading authority, inadvertent custody, and (for surprise examination purposes) qualifying standing letters of authorization, and amend Form ADV custody reporting. 

SEC Division of Examinations announces Fiscal Year 2027 examination priorities

• On October 23, 2026, the SEC’s Division of Examinations published its Fiscal Year 2027 examination priorities, identifying areas that the Division believes present heightened risks to investors or market integrity across its more than 34,000 registrants. The Division emphasized that the priorities are not an exhaustive list of matters examiners will review. 
• For investment advisers, the Division will continue to examine adherence to fiduciary duties, and will now explicitly prioritize fiduciary obligations relating to economic conflicts of interest, tying this focus to its June 9, 2026 Risk Alert. Examples include fee rebates, fee and expense calculations, cash management, and quid pro quo arrangements. New focus areas include advisers’ reliance on proxy advisory firms, and the Division will again prioritize never-examined and recently registered advisers, as well as advisers that have changed business models, grown through mergers or acquisitions, or operate from multiple dispersed branch offices.
• For broker-dealers, the Division will continue to focus on financial responsibility rules (including recent Customer Protection Rule amendments relating to daily reserve computations and US Treasury clearing), trading practices, and Regulation Best Interest, with emphasis on complex and illiquid products, ETFs investing in illiquid assets, zero-days-to-expiration options, single-stock ETFs, private placements, and structured products, as well as recommendations to move to substantially similar products, open new account types, or target older investors. The priorities state that examinations of dual registrants remain a priority. Broker-dealer AML programs now appear in an expanded, dedicated section, and a new standalone supervision section has been added.
• Across market participants, the Division will focus on artificial intelligence (including preparation for AI-related cyberattacks and policies for monitoring AI use in compliance and trading functions), compliance with amended Regulation S-P, and crypto asset and tokenization activities under existing standards of conduct, disclosure, custody, and operational resiliency frameworks. Several items from the 2026 priorities, including cash sweep programs, are no longer expressly mentioned; although firms’ underlying obligations remain unchanged.

FINRA publishes updated Quarterly Regulatory Policy Agenda

• On October 12, 2026, FINRA published its updated Quarterly Regulatory Policy Agenda, which identifies FINRA’s current priorities, active rule filings, and recently approved or immediately effective rule filings. 
• Among the priorities slated for Q4 2026 are: (1) a Regulatory Notice requesting comment on steps to deter fraud in the account opening and account transfer processes; (2) a Regulatory Notice requesting comment on amendments to Rule 4311 governing carrying agreements; (3) guidance on customer complaint reporting under Rule 4530; and (4) SEC filings addressing the annual CEO certification deadline, the Regulatory Element of continuing education, corporate financing (Rules 5110, 5121, and 5123), membership application modernization, the Same Quote Rule, branch office and Residential Supervisory Location time periods and terminology, and the Remote Inspections Pilot Program.
• Longer-term items include a proposal to amend Rule 2341 to remove the requirement to disclose cash compensation arrangements in fund prospectuses (SEC filing in Q1 2027), best execution guidance under Rule 5310 following Regulatory Notice 26-15 (Q1 2027 and following), modernized communications rules following Regulatory Notice 26-14 (SEC filing in Q2 2027), draft guidance on the use of AI tools in the application of FINRA rules, a FINRA-administered accredited investor examination, and default electronic delivery under FINRA rules, which FINRA intends to advance in tandem with the SEC’s proposed Regulation E-Delivery.

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