RIA Glossary / Examinations & Regulatory Readiness

SEC Examination

Quick Answer
An SEC examination is a review conducted by the SEC’s Division of Examinations to assess whether a registered investment adviser is complying with securities laws and its own stated policies. Exams can be routine, risk-based, or triggered by a specific event such as a complaint.
Reviewed by Sam Carter, Director of Registration Services
Last reviewed September 19, 2026

What Is an SEC Examination?

The SEC doesn’t examine every registered adviser every year — exam selection is risk-based, informed by factors like firm size, business practices, prior exam history, and areas the SEC has flagged as national priorities for that year. Exams typically begin with a notification letter and an initial document request, followed by on-site or remote review of books and records, interviews with key personnel, and testing of the firm’s compliance program against its written policies.

At the end of the process, the firm generally receives either a closing letter (no issues found) or a deficiency letter outlining problems that need to be corrected, sometimes within a specific timeframe.

Why it Matters

Firms that treat compliance as an ongoing practice rather than a once-a-year task tend to fare far better in exams — because examiners are specifically looking for evidence that policies are followed day-to-day, not just documented on paper.

Frequently Asked Questions

How much notice does the SEC give before an exam?

Notification can range from a few days to a few weeks depending on exam type; some “sweep” exams give minimal notice.

What happens if my firm fails an SEC exam?

There’s no formal “pass/fail” — outcomes range from a clean closing letter to a deficiency letter, and in serious cases, referral for enforcement action.
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Related Terms

Regulation S-P

What Is Regulation S-P? Regulation S-P requires two main things: a privacy notice given to clients

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