Each year the New Jersey Bureau of Securities (the “Bureau”) publishes an examination that all New Jersey registered investment advisors must complete. According to the Bureau, these examinations are used to assess compliance risks among investment advisers and thus allows the Bureau to be proactive in its “investor protection efforts.”1
On June 8, 2026, the Bureau announced this year’s examination which focuses on “seeking deeper insight into firms’ Cybersecurity protocols and use of Artificial Intelligence” (“AI”).[1][2] Through this examination, the Bureau focuses “on protecting investors’ sensitive data online and examining the emerging risks posed by the use of artificial intelligence.” 1 The examination includes specific questions seeking information regarding:
(1) advisory firms’ use of AI in any manner “(including but not limited to data gathering or as a research tool) to generate investment portfolios, models, or recommendations to clients;”
(2) how firms “market, advertise, or represent to clients that AI is used in any part of its investment process,” i.e., how AI use information is disclosed to clients; [3][4]
(3) whether firms maintain written policies and procedures on cybersecurity and, if so, “conduct ongoing periodic training to representatives and employees on its policies and procedures;” and
(4) whether advisory firms “perform ongoing periodic due diligence on its vendors including their cybersecurity procedures.”3
Per Bureau Chief Keith A. Alt, “[a]rtificial intelligence and other emerging technologies may create new opportunities in the investment marketplace, but they also present new risks that demand careful oversight.”1 According to New Jersey Attorney General Davenport, “[a]s cybersecurity threats proliferate and the use of artificial intelligence increases, the focus of this year’s examination reflects our continued commitment to protecting the hard-earned money of New Jerseyans from risks both old and new.” 1
This year is not the first that the Bureau focused on AI or Cybersecurity, confirming them as a priority to the Bureau.[5][6] The focus on AI and cybersecurity is also in line with FINRA’s focus on these topics in its 2026 annual regulatory oversight report.[7][8] Responses to the Bureau’s current the examination are due June 30.2 Because of the scrutiny by the Bureau and FINRA, every New Jersey Registered Investment Advisor should focus on and evaluate its use and policies on AI and cybersecurity.
[1] https://www.njoag.gov/new-jersey-bureau-of-securities-annual-examination-of-investment-advisers-will-look-closely-at-ai-and-cybersecurity/
[2] The examination is due June 30, 2026 and is available here.
[3] https://www.njconsumeraffairs.gov/bos/Pages/Investment-Adviser-Written-Examination.aspx.
[4] On a lesser note, the examination also seeks information on whether the adviser firm offers asset management services related to “Artificial Intelligence (AI) or similar technologies to create currency products or trading platforms.”
[5] The 2019 Annual Examination focused on cybersecurity, https://www.njoag.gov/new-jersey-bureau-of-securities-announces-annual-examination-of-investment-advisers-is-underway-this-years-examination-puts-cybersecurity-at-the-forefront/
[6] The 2024 Annual Examination focused on AI, https://www.njoag.gov/new-jersey-bureau-of-securities-announces-annual-examination-of-investment-advisers-is-underway-2024-0513/
[7]https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.finra.org/sites/default/files/2025-12/2026-annual-regulatory-oversight-report.pdf&ved=2ahUKEwiuobncto6VAxVokIkEHZ2jJ3oQFnoECA0QAQ&usg=AOvVaw1NBItbWPqfv8U_YUqoIPjK
[8] The Chief Regulatory Operations officer also stated in the report that: “[t]he 2026 Report includes new and updated content on cyber-enabled fraud, senior investors and trends in generative artificial intelligence (GenAI), among other topics.