SEC Division of Examinations Issues Exam Handbook

On October 1, 2026, the U.S. Securities and Exchange Commission (SEC or Commission) Division of Examinations (EXAMS) published “The SEC Exam Handbook: A Practical Guide on Process and Engagement” (Handbook). The Handbook replaces the brochure that has accompanied exam notification letters for many years (Brochure). SEC leadership described the Handbook as clarifying the examination process, establishing clear expectations, and making the process more consistent and predictable for everyone involved.

The Handbook in Brief

The Handbook is a staff statement with no legal force, and much of what it describes, including several of the additions noted below, memorializes longstanding practices and positions. In the Handbook, EXAMS addresses the following:

• Selection and opening. Examinations are risk-based, informed by factors including prior examination history, time since the last examination, conflicts presented by products and business activities, changes in key personnel, media reporting, and access to client assets. The reason for an examination is nonpublic, and selection “is not, in itself, a signal that something is wrong.” Most examinations begin with a call to the chief compliance officer, followed by a letter and initial information request. The Handbook reminds registrants that the identity of staff can be confirmed by calling the Examination Hotline.
• Fieldwork. The staff expects records to be available within 24 hours but “usually provides two weeks to produce records” for the initial request. The Handbook states that the staff will grant reasonable extensions and allow for rolling productions. The staff also may seek information directly from third parties, including custodians, administrators, auditors, and clients. In a nod to technological advances, the Handbook also states that staff do not consent to recording, transcription, or artificial intelligence notetaking tools during meetings with the staff.
• Closing. The staff has 180 days after an exit conference to issue a disposition letter. The Handbook identifies three outcomes: The examination has concluded, it has concluded without findings, or corrective action is requested. The third involves the issuance of a deficiency letter, which the Handbook states is the outcome of most examinations. Staff typically requests a written response to a deficiency letter within 30 days and strives to provide further comments, if any, within 60 days of the response. The Handbook confirms that staff may refer examination issues to the SEC Division of Enforcement, a self-regulatory organization, a state regulatory agency, or criminal authorities and may refer a matter to the Division of Enforcement without an exit conference or deficiency letter, typically when exigent circumstances exist.

Notable Updates

The Handbook retains much of the Brochure’s substance, and most of what it adds memorializes existing staff practice rather than announces new substantive positions. Points the Handbook now addresses more expressly in writing:

• Privilege logs. A registrant withholding responsive material on privilege grounds should provide a privilege log.
• Policy-division consultation. Where an examination involves “interpreting a new rule or applying an old rule to novel facts,” staff “will generally consult with the relevant policy division to help ensure our views are consistent.” The staff may share information received from the registrant with other Commission staff.
• Ongoing dialogue. A new “Ongoing Dialogue” section states that staff “will be in contact with you throughout the exam” and encourages registrants to correct any misunderstandings “as soon as possible.”
• Remediation. Staff generally will not comment on the adequacy of proposed corrective action, but prompt and appropriate remediation “may be a mitigating factor” in whether a finding is referred to the Division of Enforcement. That distinction is important when framing a response: Registrants should consider the legal basis for a finding and whether there are proposed remedial steps that can be taken to address the staff’s concerns.
• Mutual expectations. The Handbook includes a “Working Together” table that makes explicit a set of reciprocal expectations, including active engagement and “transparency about known compliance issues or concerns relevant to the examination” from registrants, and clear requests, status discussions, and an exit conference as appropriate from EXAMS.
• Examination Hotline. The Handbook also identifies channels for unresolved concerns, including the exam team and its supervisors and the Examination Hotline (202-551-EXAM), which connects to EXAMS’ Office of Chief Counsel, permits anonymous feedback and offers the option to speak with the SEC’s Office of Inspector General.

Our Take

The Handbook reflects an effort to provide a more consistent examination experience across offices and supervisory groups and to make practices more accessible, integrated, and predictable. For registrants, the practical takeaway is to engage with the staff throughout the examination, raising misunderstandings promptly and discussing timing or production challenges early rather than at the end of the process. Addressing questions and potential issues as they arise and maintaining a thoughtful, open dialogue with the examination team can help promote a more efficient, informed, and constructive process.

 

Matthew Dutton contributed to this Sidley Update.