SEC Exam Handbook: Your Next Exam Starts Before the Request Letter

The SEC Exam Handbook Starts the Exam Before Your Firm Knows About It

On October 1, 2026, the SEC's Division of Examinations published "The SEC Exam Handbook: A Practical Guide on Process and Engagement," announced in Press Release 2026-99. The handbook replaces and expands upon the Division's previous examination brochure. It walks registrants through each stage of an exam, from the risk assessment process through to the disposition letter.

But here is the part the headlines are missing. The first stage the handbook covers is not the document request letter. It is risk assessment, which happens inside the Division before a firm is told anything. For a registered investment adviser, the exam therefore starts from the record the firm has already built through its filings and compliance history. The preparation window is not the few weeks after a request arrives. It is now.

Here is what happened, why it matters, and what your leadership team should decide this quarter.

From Brochure to Handbook: What the SEC Actually Changed

The SEC has long given firms under examination a brochure describing the process. An SEC-hosted version of that brochure covered broker-dealers, transfer agents, clearing agencies, investment advisers and investment companies in a few pages. The new handbook replaces and expands upon that document. According to the release, it gives registrants more detail on what to expect, several avenues for feedback or questions, and practical tips and resources for preparing for an exam and staying current on compliance obligations.

The release quotes SEC Chairman Paul S. Atkins and Keith Cassidy, Director of the Division of Examinations. Both stress transparency and a more consistent, predictable exam process. The SEC's exam announcements page lists Cassidy's appointment as Director on January 20, 2026. That makes this handbook one of the clearest public statements of how the Division under his leadership intends to run exams.

What the handbook is not

The handbook is not a rule. Bloomberg Law reported that agency leaders said it does not create new policy and instead expands on previous agency documentation. Bloomberg Law also reported that at least one investor advocate raised concerns. The SEC release itself does not address binding effect, and no effective date or transition period has been published. Treat the handbook as a description of process, not a change in your firm's legal obligations.

Process Transparency Is Not Exam Leniency

Many founders will read "transparency" and "predictability" as a softer exam regime. That reading conflates two different things.

Transparency is about process. It tells you what the stages are, roughly how the Division moves through them, and where you can ask questions. Leniency is about outcomes. It would mean examiners tolerate deficiencies they once cited. The handbook, as described by the SEC and by Bloomberg Law, does the first. Nothing in the public record suggests it does the second.

Why a published process raises the bar for advisers

Once the Division publishes a stage-by-stage account of an exam, a firm has a harder time explaining why it was not ready for any one stage. A CCO who says "we did not know they would ask for that" is now arguing against a public document. For an RIA, the practical exposure is less about new rules and more about operational readiness:

• Leadership time. Document production pulls in the CEO, CFO and CTO as well as the CCO. A predictable process lets you budget that time instead of absorbing it as a surprise.
• Record quality. If risk assessment comes first, the accuracy of what the firm has already filed and documented sets the tone before examiners arrive.
• The disposition letter. The handbook carries the process through the disposition letter. The way a firm responds to findings is part of the exam, not something that happens after it.

The word "Engagement" in the title

The Division chose to put "Engagement" in the handbook's title and to describe several avenues for feedback or questions. For an adviser, that is an invitation to use those channels deliberately. A firm that never uses them gives up a tool the Division has now said it values.

What Your Leadership Team Should Decide This Quarter

The handbook does not change your obligations. It does change how defensible an unprepared exam response looks. These are the decisions that belong at the leadership level, not in the compliance inbox.

Ownership and readiness

• First, name a single exam owner. Usually this is the CCO, with authority to pull time from operations, finance and engineering on short notice.
• Second, run compliance testing against the handbook's stage sequence. Map your current policies and testing records to each stage, from risk assessment through disposition, and find the gaps before an examiner does.
• Third, build document production capacity now. Know where advisory agreements, marketing materials, trading records and policies live, who can export them, and how fast.

After the exam

• Fourth, decide in advance who drafts and approves the disposition response. A remediation plan written in a hurry tends to promise more than the firm can deliver.
• Fifth, set a board or investment committee briefing cadence. Investors and fund boards increasingly ask about exam history. A clean, documented process is an asset in diligence.

What to ask your general counsel or outside counsel

1. Which parts of our compliance program would we struggle to evidence within a few days?
2. Do our written policies match what we actually do?
3. Who speaks for the firm at each stage of an exam, and who does not?

Key Takeaways on the SEC Exam Handbook

The handbook is a process document. These points still carry real consequences for any registered firm.

• Your exam begins before the request letter. The handbook starts with the risk assessment process, so your existing filings and records shape the exam before you are notified.
• This is not a new rule. Bloomberg Law reported that agency leaders said the handbook creates no new policy, so your substantive obligations are unchanged.
• Predictability removes excuses. A published, stage-by-stage process makes unpreparedness harder to defend in front of examiners and investors.
• The disposition letter is part of the exam. How your firm responds to findings deserves the same planning as document production.
• Engagement is now an expectation. The Division built feedback and question channels into the handbook, and advisers should decide in advance how to use them.

Where This Leaves Registered Advisers

The SEC has now published the exam's playbook, and the firms that benefit will be the ones that prepare against it before the risk assessment stage begins.

Advisers and fund managers generally need their compliance testing, document production workflow and disposition-response plan reviewed against the handbook's stages before their next exam cycle. That review is the work FinTech Law's SEC exam counsel does on a fixed-fee basis, and you can start that conversation through our contact page.

This blog post is for informational purposes only and does not constitute legal advice. No attorney-client relationship is formed by reading this content. If you need legal advice, please contact a qualified attorney.