RIA Glossary / Examinations & Regulatory Readiness

State Examination

Quick Answer
A state examination is a compliance review conducted by a state securities regulator for advisers registered at the state level rather than with the SEC. The process is similar in structure to an SEC exam, but requirements and examination priorities vary by state.
Reviewed by Sam Carter, Director of Registration Services
Last reviewed September 19, 2026

What Is a State Examination for Investment Advisers?

Advisers below the roughly $100 million AUM threshold typically register with their home state rather than the SEC, which means their examinations come from the state securities division instead of the SEC’s Division of Examinations. Many states participate in coordinated exam programs and follow guidance from NASAA, but the specific rules, document requests, and follow-up procedures can differ meaningfully from state to state — and from the SEC’s approach.

Firms operating in multiple states through notice filings should also be aware that their home-state regulator, not every state they’re registered in, generally conducts the primary exam.

Why it Matters

State-registered advisers sometimes assume state exams are lower-stakes than SEC exams — in practice, state regulators can be just as thorough, and the variation between states means firms need to know their specific state’s expectations rather than assuming SEC-style guidance applies uniformly.

Frequently Asked Questions

Do state exams follow the same schedule as SEC exams?

No — timing and frequency vary significantly by state and are generally at the state regulator’s discretion.

Can a firm be examined by more than one state?

It’s uncommon but possible in certain circumstances; the home-state regulator is typically the primary examiner.
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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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