SEC Announces Updated Exam Booklet
“The Securities and Exchange Commission’s Division of Examinations today published its new handbook, ‘The SEC Exam Handbook: A Practical Guide on Process and Engagement,’ which replaces and expands upon the previous examination brochure by providing registrants with more insight and detail about what to expect during an examination.
“The new handbook provides a clear roadmap of the process used by division examiners across the country to help ensure consistency and is designed to emphasize the Commission’s commitment to approach each examination with an accessible and collaborative mindset. In addition to supporting the SEC’s mission, division examinations are designed to improve industry practices and compliance, monitor risk, and prevent fraud.”
Why It Matters:
In addition to describing each stage of an exam, the Exam Handbook provides registered entities with guidance and resources to stay current on compliance obligations. Although federal financial exam handbooks, updates, and risk alerts do not create legal obligations distinct from those in statutes and regulations, due to policy differences in the legal frameworks they enforce, the documents published by the SEC and the federal bank regulators differ in their informative status and significance.
Authoritativeness of Financial Regulator Exam Handbooks/Other Guidance: SEC laws and regulations are based on legal principles intended to operate as an internal guide to registered entities who tailor their compliance programs to their specific use cases; following or deviating from SEC staff guidance does not provide an automated safe harbor from enforcement actions.
Authoritativeness of Bank Regulators (e.g., OCC and CFPB): These laws and regulations are based on prescriptive rules necessitating compliance with more structured technical requirements to ensure regulatory policy objectives (like safety and soundness). Their compliance guidance carries more weight with less discretion for registered entities to deviate from regulator guidance. In the case of the CFPB, violating its exam manual procedures can trigger automatic enforcement referrals to the DOJ or IRS.
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Robinhood Lets AI Agents Trade Without Customer Sign-Off
Robinhood has announced a new feature to its brokerage trading platform used by retail investors. This new feature allows customers to use Robinhood’s proprietary AI agent to trade for them. Customers can either approve the trades by default, or they can turn approvals off and let the agent act alone. As of October 1, Robinhood said the feature would be coming soon to eligible U.S. customers.
“Robinhood is clear about who carries the risk. All risk for agent trades falls on the customer, Robinhood’s disclosures state. That disclaimer applies whether approvals are on or off. Robinhood said it doesn’t supervise, monitor, or audit the agents.”
Why It Matters:
To date, the SEC and FINRA have not provided a point of view on this new feature. In addition, the feature could be subject to state laws governing the use and development of AI agents. In May 2026, Robinhood announced an interface allowing customers to use third-party AI agents to make trading decisions, but this enhancement is embedded within the Robinhood platform; there is no need to connect a third-party AI agent.
SEC Proposal Would Address How Investment Advisers and Funds Can Custody Crypto Assets Under the Federal Securities Laws
“The Securities and Exchange Commission today proposed new rules and amendments to provide a tailored framework for the custody of crypto assets for registered investment advisers and regulated funds, i.e. registered investment companies and business development companies.”
Why It Matters:
Among other things, the proposal would permit certain state-chartered trust companies to serve as crypto custodians, largely codifying existing no-action positions. It would also, for the first time, permit limited self-custody of digital assets if the asset manager determines that no eligible third-party custodian is available. Separately, it would expand the custody provisions applicable to registered investment companies and advisers. Comments are due 60 days after Federal Registration publication (pending).
