Capital markets & investment advisers
The supervisor has already named the problem. Most firms have not answered it.
SEC examination priorities
Books and records · supervisory procedures
SEBI Regulation 16C (India)
The problem in one sentence
FINRA's 2026 Regulatory Oversight Report, published 9 December 2025, sets out risks specific to AI agents — among them the difficulty of reconstructing multi-step agent reasoning for audit purposes — and points firms toward agent-specific supervisory processes covering permission limits, access monitoring and where a human must remain in the loop. The supervisor has written the question down. The firms that can answer it in an examination are rare, and the compliance officer who cannot is personally exposed.
Where it breaks
| Failure point | What actually happens |
|---|---|
| Supervisory procedures | Written supervisory procedures assume a supervisor who can review what a person did. An agent that chains retrieval, analysis and an action across several steps produces no reviewable equivalent unless one was designed in. |
| Reconstruction | Reconstructing the reasoning behind a recommendation months later is the exact capability an examination tests, and the exact capability most agent stacks discard at the end of a session. |
| Permission limits | An agent with a data entitlement broad enough to be useful is usually broad enough to reach material non-public information. Scoping that is an architecture problem, not a policy one. |
| Personal accountability | The named compliance officer signs. Nobody has yet made a non-human actor fit cleanly into a supervisory structure built entirely around people who can be examined. |
| One body of work, two markets | SEBI's Regulation 16C and its 2025 responsible-AI consultation mirror the US direction closely enough that the same governance work usually serves both a US and an Indian entity. |
The Capital markets & investment advisers regime references above are checked against their primary sources on an ongoing basis. Instruments move — several cited here changed inside the last year — so verify against the source before you rely on one. If you find something stale, tell me and I will correct it.
If any of this is live for you
The fastest route is a conversation. Bring the architecture you are worried about — the first useful thing usually surfaces inside twenty minutes.