Current Month (September 2026)
PCAOB Adopts Amendments to Audit Firm Quality Control Standard
By Thomas W. White, Retired Partner, WilmerHale
The Public Company Accounting Oversight Board has approved amendments to QC 1000, A Firm’s System of Quality Control, and to related forms and rules. QC 1000 is the comprehensive quality control standard for registered public accounting firms that the PCAOB adopted and the Securities and Exchange Commission approved in 2024. The PCAOB took this action on September 9, following a June 9 request for comment on potential amendments to QC 1000. (See this note describing the proposed amendments and prior regulatory proceedings.)
The PCAOB largely adopted the amendments as proposed. These include the two most significant proposed amendments, which
- rescind the “design only” requirement that required registered firms to design QC systems in compliance with the rules, even if they did not audit any public companies; and
- rescind the requirement that firms that audit more than one hundred issuers per year have an “External Quality Control Function,” i.e., a governance process in which one or more independent individuals evaluate a firm’s QC judgments made and conclusions reached when evaluating and reporting on the effectiveness of the firm’s QC system.
The amendments also cover specific aspects of QC 1000 in the following areas: roles and responsibilities with respect to a firm’s QC system; information and communication; the QC monitoring and remediation process; evaluation and reporting on the QC system, including reporting to the PCAOB; and documentation requirements.
The amendments do not change the December 15, 2026, effective date of QC 1000. Subject to SEC approval, the amendments to QC 1000 and to the related forms and rules will also become effective on December 15, 2026.
PCAOB Chairman Demetrios (Jim) Logothetis noted that the amendments “help us not only to fulfill our critical responsibility of getting QC 1000 right, but also to establish a foundation for our proposed strategic goal of modernizing the PCAOB’s inspections with a QC-focused approach.”
SEC Division of Examinations Issues Risk Alert on RIA Annual Compliance Reviews
By Karen Liu, Reid & Wise LLC
On September 14, 2026, the Division of Examinations (the “Division”) of the U.S. Securities and Exchange Commission (the “SEC”) issued a risk alert (the “Risk Alert”) regarding annual compliance reviews of SEC-registered investment advisers (“RIAs”). This annual review is one of the requirements pursuant to Rule 206(4)-7 (the “Compliance Rule”) under the Investment Advisers Act of 1940 (the “Advisers Act”).
The Risk Alert highlighted the following deficiencies related to RIAs’ annual reviews of their compliance policies and procedures as observed by the Division staff during their recent examinations:
- Failure to conduct annual reviews at least annually. For example, having a gapped year; performing reviews for eighteen months rather than annually (twelve months); or using training or attestations in lieu of annual reviews.
- Failure to adopt procedures or having incomplete procedures to assess the adequacy and effective implementation of RIAs’ policies and procedures. For example, failure to document procedures required in RIAs’ compliance policies; or failure to include compliance policies’ certain required topics in annual reviews.
- Failure to conduct annual reviews in line with written procedures. For example, failure to follow compliance policies and procedures; or using outdated versions of policies and procedures.
- Failure to make sure policies and procedures address and align with RIAs’ business practices. For example, policies and procedures that failed to address RIAs’ pivotal risk areas or failed to consider changes in RIAs’ business activities; annual reviews that failed to identify inconsistencies between RIAs’ practices and policies and procedures and/or client disclosures; marketing policies and procedures that failed to be updated to reflect compliance with the Marketing Rule under the Advisers Act; or annual reviews that failed to record or address incidents of noncompliance identified during the review period.
- Failure to maintain documentation regarding annual reviews in RIAs’ books and records. For example, failure to maintain documentation generated during annual reviews addressing compliance issues/violations; failure to prepare written annual review reports; or failure to follow or fully follow documentation requirements of annual reviews required in RIAs’ policies and procedures.
- Failure to take corrective actions for issues identified in prior annual reviews.
The Risk Alert also emphasized the importance of updating policies or procedures, conducting interim reviews, and maintaining accurate and current books and records documenting RIAs’ annual reviews.
The Risk Alert shared the Division’s examination observations and provided a timely guideline and checklist for RIAs when they conduct their upcoming annual reviews.
SEC Issues Proposed Rules to Rescind Rule 14a-8, Modernize Proxy Rules
By Noah B. Levin, WilmerHale
On September 16, 2026, the SEC issued two proposing releases relating to its proxy rules under the Exchange Act.
The first proposal would rescind in its entirety Rule 14a-8, the longstanding rule enabling eligible shareholders to include proposals in a company’s annual shareholder meeting proxy materials on the grounds that the rule exceeds the SEC’s statutory authority and intrudes into state corporate law without express Congressional authorization. If rescinded, state corporate law or, if permitted by state law, a company’s governing documents would determine whether a shareholder proposal must be included in the company’s proxy materials.
The release would also amend Rule 14a-4(c) to permit discretionary voting on proposals submitted outside Rule 14a-8 and omitted from the proxy materials, regardless of whether the proponent made a timely submission or distributed its own materials. A company could exercise this authority if its proxy materials include
- a brief description of the proposal and the company’s voting intention in the proxy statement;
- a cross-reference to that disclosure on the proxy card; and
- a checkbox permitting a shareholder to withhold discretionary authority.
Only one checkbox would be required regardless of the number of proposals submitted, though companies could voluntarily include more.
The second proposal would modernize the solicitation process by
- eliminating the requirement to deliver the annual report to security holders where a Form 10-K is already filed on EDGAR for the prior fiscal year before the proxy statement was sent, and eliminating the Item 201(e) stock performance graph requirement for all registrants except investment companies;
- removing the twenty business day delivery deadline for proxy statements incorporating information by reference, with parallel changes to Forms S-4 and F-4 and Schedule 14C;
- rescinding the Rule 14a-6(g) Notice of Exempt Solicitation;
- reducing the minimum broker search period from twenty to five business days; and
- requiring contact information on the cover pages of Schedules 14A and 14C.
For more information, please see the WilmerHale blog.
CFTC Division of Market Oversight Releases Staff Advisory on “Mention Markets”
By Noah B. Levin, WilmerHale
The Division of Market Oversight (the “Division”) of the Commodity Futures Trading Commission (“CFTC”) released a staff advisory on September 22, 2026, addressing the listing and trading of event contracts that settle based on whether an individual will say or mention certain words, attend or appear at an event, or otherwise interact with another person (collectively, “Mention Markets”) (the “Advisory”). The Advisory is addressed to designated contract markets (“DCMs”), and its analysis also applies to event contracts that may be listed by swap execution facilities.
Unlike most event contracts, which settle on independently generated, externally verifiable outcomes outside the control of any single person, Mention Markets settle on the discrete conduct of a named person. As a result, they may be susceptible to manipulation by persons who can influence the outcome or act on advance knowledge.
Division staff stated that they may view Mention Markets as presumptively readily susceptible to manipulation under DCM Core Principle 3 and accordingly expect a heightened showing in support of submissions seeking to list such contracts. The Advisory identified four nonexhaustive factors relevant to whether a well-designed contract, coupled with DCM rules and controls, may rebut this presumption:
- whether the controlling individual is subject to independent legal, professional, contractual, fiduciary, confidentiality, or organizational obligations that meaningfully deter conduct designed to affect settlement
- whether the contract may be manipulated not only by the individual but through the individual
- whether the underlying conduct is subject to transparent, independent verification and contemporaneous, substantial public scrutiny, including its materiality in context
- whether the DCM has adopted prophylactic trading rules, surveillance, and controls reasonably designed to detect and deter manipulation and the misappropriation of nonpublic information, including measures calibrated to the risks presented by identified controllers and known insiders
The Advisory states that staff expects Part 40 filings for Mention Market contracts to thoroughly evaluate each factor and specify the DCM’s prophylactic measures in sufficient detail for staff to assess whether those measures are reasonably designed to mitigate manipulation risks. It also encourages DCMs to engage with the Division early in the contract-design process.
By Isaiah S. Chatman, WilmerHale
On August 31, 2026, the Securities and Exchange Commission and the Food and Drug Administration announced that the agencies had entered into a Memorandum of Understanding (“MOU”) to enhance cooperation between the agencies in furtherance of their respective missions of promoting market integrity and protecting public health.
The MOU establishes a formal framework for cooperation between the SEC and FDA in connection with their regulatory and enforcement responsibilities. The principal objective of the agreement is to improve market oversight and compliance by facilitating closer collaboration on matters that intersect both agencies’ jurisdictions, particularly in the life sciences and healthcare sectors, where FDA actions and decisions can have a significant impact on publicly traded companies and investors.
Under the MOU, both agencies will implement information-sharing protocols designed to enable the exchange of information relevant to their respective missions. Enhanced communication is intended to assist the SEC in administering and enforcing federal securities laws, including disclosure requirements applicable to public companies, while also supporting the FDA’s efforts to oversee the safety and effectiveness of FDA-regulated products.
SEC Chairman Paul S. Atkins emphasized that FDA-related disclosures can materially affect financial markets and noted that the FDA is an important partner in the SEC’s enforcement and oversight efforts. Acting FDA Commissioner Kyle Diamantas likewise highlighted the role of increased transparency and information sharing in protecting patients, maintaining public trust, and fostering continued healthcare innovation.
The agreement will remain in effect for three years and may be extended or modified through the mutual written consent of both agencies.
For more information, please refer to WilmerHale’s client alert on the subject.
SEC Issues Exemption to Facilitate Trading of Tokenized NMS Stock
By Isaiah S. Chatman, WilmerHale
On September 17, 2026, the SEC issued a temporary and conditional exemptive relief designed to facilitate the trading of tokenized National Market System (“NMS”) stocks on blockchain-based platforms. The order grants conditional exemptive relief to certain Tokenized Securities Venues (“TSVs”), allowing them to operate without being classified as traditional securities exchanges under the Securities Exchange Act of 1934 (“Exchange Act”). The exemption is intended to support the development of onchain securities trading as the SEC continues to evaluate whether broader regulatory changes are required.
TSVs will enable trading in tokenized NMS stocks through permissioned automated market makers and liquidity pools. TSVs bring together buyers and sellers by providing blockchain-based trading infrastructure and establishing standards for participant access. SEC Chairman Paul S. Atkins notes that the exemption represents a significant step toward modernizing U.S. capital markets and exploring the benefits of tokenized securities within the SEC’s existing statutory framework. Director of the SEC’s Division of Trading and Markets Jamie Selway further added that this exemption is a critical milestone in expending market access for tokenized securities.
To protect investors and maintain market integrity, the exemption is subject to various conditions. TSVs must ensure that tokenized stocks provide the same rights and privileges as the corresponding traditional shares, comply with limits on trading volume and the number of securities traded, and provide issuers written notice and an opportunity to object to the issuer of the underlying NMS stock before listing unaffiliated third-party tokenization. Furthermore, TSV smart contracts must be auditable and publicly deployed on permissionless blockchains, trading must halt when trading in the underlying stock is stopped, and TSVs must publicly disclose information about their operations and affiliated trading activities. The order also provides a temporary conditional exemption from the Exchange Act’s dealer definition under section 3(a)(5) for certain liquidity providers participating in TSV liquidity pools.
The exemptions are set to expire five years after publication, and the SEC is currently soliciting public comments to assist future rulemaking and modifications to the current exemptive relief.
SEC Proposes to Modernize Transfer Agent Rules
By Isaiah S. Chatman, WilmerHale
On September 1, the SEC proposed updates to the rules and forms applicable to registered transfer agents. Transfer agents play a critical role in the national clearance and settlement system and now perform a variety of functions and services that are not adequately addressed by the SEC’s existing transfer agent rules, which have not been substantively updated since their adoption in the late 1970s and early 1980s.
The proposal is intended to modernize the federal transfer agent regulatory framework while continuing to support the safe and efficient operation of the securities markets and the national clearance and settlement system. The proposed updates are designed to reflect the evolving technological environment in which transfer agents operate, including the widespread use of electronic recordkeeping and communications, as well as the services they provide to issuers, investors, and other market participants.
The proposed release is available on the SEC’s website and published in the Federal Register. The public comment period will remain open through November 3, 2026.
SEC Grants Exemptive Relief from Certain Inline XBRL Filing or Submission Requirements
By Isaiah S. Chatman, WilmerHale
On September 14, 2026, the SEC granted exemptive relief from certain Inline XBRL requirements adopted on December 16, 2024. Specifically, the exemptions apply to the following filings: Form CA-1 (except Exhibit H thereto), Form 1 (except Exhibit I thereto), Form X-17A-5 Part III, Form 17-H, and the annual compliance report of a security-based swap dealer or major security-based swap participant. SEC Chairman Paul S. Atkins stated that these measures will reduce compliance costs and enable market participants to reallocate resources to support and enhance their operations and existing compliance obligations. Because the requirements are expected to impose substantial costs with little added benefit to transparency or investor access to information, the exemptive relief may help prevent those costs from ultimately being passed on to investors through increased fees.
