Last year, the SEC’s FY2026 Exam Priorities identified “emerging financial technologies” as an area of focus and Drawbridge prioritized AI as part of our broader cybersecurity guidance to clients. Recent SEC exams indicate a shift towards evaluating AI as a standalone risk area, rather than generalizing it as part of a larger audit. The SEC has asked RIAs and private fund managers to produce evidence of policy driven governance in place, not simply an attestation that controls exist.
What examiners are asking for:
· A documented AI Asset Inventory, including third-party service providers
· The business purpose, classification and type of AI used
· AI governance policies and procedures including permitted and prohibited AI use
· Supervisory records, training evidence, risk assessments, and escalation reports
What examiners are evaluating:
· Established AI governance or steering committee, evidence that it functions as active oversight, including records of meetings, decisions, and follow-up actions taken
· Documented policies and procedures showing how AI use is monitored and supervised across the firm, particularly where AI touches fraud detection, back-office operations, AML, or trading functions
· Evidence that AI-related capabilities and representations made to investors are accurate and match what’s deployed, not overstated in marketing or disclosures
· Confirmation that operations and controls in place align with what’s been disclosed to investors, including how third-party AI tools and vendors are overseen
· Proof that AI-influenced recommendations remain consistent with each investor’s profile and stated investment strategy, with human review built into that process
· Training and security controls that address AI-specific risks directly, including how threat intelligence on AI-related risks is identified and acted on
Where Drawbridge comes in:
We’ve been integrating AI security into client programs since 2023, and that experience has grown into a dedicated AI Risk Intelligence offering built specifically for these governance challenges. Our AI advisory team brings hands-on experience across hundreds of clients in the alternative investment space, giving us a deep understanding of the regulatory scrutiny and risk profile unique to our market. We help clients close governance gaps and build the inventory, policy, vendor documentation, and training records needed to respond to an exam documentation request with confidence rather than exposure
