The Securities and Exchange Commission’s Division of Examinations published a new handbook on October 1, “The SEC Exam Handbook: A Practical Guide on Process and Engagement.” It replaces and expands the previous examination brochure and describes what registrants should expect during an examination.
What the handbook covers
According to the SEC’s release, the handbook walks through each stage of an exam, from the risk assessment process to the disposition letter. It lists several ways for registrants to give feedback or ask questions, and adds tips and resources for exam preparation. The Division describes it as a roadmap of the process examiners use across the country.
Keith Cassidy, Director of the SEC’s Division of Examinations, said: “By answering the call from registrants to provide more clarity to the exam process, we aim to make the process more consistent and predictable for everyone involved.”
Why it matters
A written account of each exam stage gives a newly registered fintech adviser something to build a preparation checklist from, and gives a compliance lead a document to cite when staffing a first exam.
The SEC also proposed a custody framework for advisers and funds the same day, which we cover in our analysis of US and UK crypto custody rules. Our earlier piece on the SEC’s time-limited exemption for tokenized stocks covers another recent SEC action for registrants.
Our read
A handbook does not change what an examiner can ask for. What it can change is how prepared a firm is when the request arrives. The release does not say the handbook alters any rule, and it names no new exam priorities. Firms that treat it as a checklist rather than a policy shift will read it correctly. The practical step is to compare the stages it lists against the firm’s current exam-readiness procedure and fix any stage where nobody owns the response.
Source: SEC
