SEC Publishes a New Exam Handbook: What Private Fund Managers Should Do Before an Examination Notice Arrives
The SEC's examinations division published a handbook on 1 October 2026 setting out each stage of an exam, from selection to the disposition letter. It is guidance, not a rule. Here is how to prepare.
On 1 October 2026 the Securities and Exchange Commission's Division of Examinations published "The SEC Exam Handbook: A Practical Guide on Process and Engagement." The SEC said, in press release 2026-99, that the handbook replaces and expands the previous examination brochure and covers each stage of an exam, from the risk assessment process to the disposition letter. It is not a rule. The handbook states that it represents the views of the division's staff, is not a rule, regulation or statement of the Commission, and creates no new or additional obligations. There is no compliance date and no comment period. For a private fund manager, the value is in knowing the clock before it starts.
What the handbook covers
The handbook walks through eight stages: candidate selection, announcing the examination, information requests, interviews and on-site visits, the exit conference, the examination outcome in a disposition letter, the registrant's response, and the staff's comments on that response. SEC Chairman Paul Atkins said the handbook clarifies the process and sets clear expectations. Division Director Keith Cassidy said the aim is a process that is more consistent and predictable. The handbook does not address advisers to private funds specifically, so it applies to registrants generally and any private fund reading should be your own.
The timelines to know
The handbook says the Commission expects records to be available to staff within 24 hours in most circumstances, and that in practice the staff usually provides two weeks for an initial request. Supplemental requests vary with their nature. Staff will grant requests for reasonable extensions or rolling productions where appropriate.
At the other end, the staff aims to send a disposition letter within 180 days of either the completion of on-site work, if there is any, or the receipt of all requested records, whichever is later. If the letter lists deficiencies, the handbook asks for a response within 30 days of the date of the letter, and staff follow-up comments are aimed within 60 days of that response.
Information provided in an exam is presumed confidential and non-public under 17 C.F.R. 203.2, and a registrant can ask for confidential treatment of material under FOIA through SEC Rule 83, 17 C.F.R. 200.83. The staff does not record or transcribe meetings and tells participants not to do so either. It also does not consent to recording, transcription or artificial intelligence notetaking tools.
What the handbook asks of registrants
The practical advice in the handbook is short: keep filings current and accurate, prepare knowledgeable personnel for meetings, communicate promptly about questions on an information request, request extensions as soon as possible, provide a privilege log if you claim privilege, and disclose known compliance issues or concerns that are relevant to the exam.
Eight steps for a fund manager
First, name an exam lead and a back-up. The chief compliance officer is the usual choice, but the back-up should be able to produce records without them.
Second, build a standing exam binder. Include your compliance manual, valuation policy, fee and management fee allocation records, expense policy, evidence of custody arrangements, marketing materials with the support for each claim, and the filings you have made as a registrant. Our look at the SEC's proposed rewrite of the adviser custody rule explains why custody evidence deserves its own section.
Third, test the clock. Pick five documents at random and time how long it takes to produce them. If the answer is days, the two weeks the staff usually provides is tight, and the 24-hour expectation is out of reach.
Fourth, prepare a privilege protocol and a log template before you need either, and decide who may request an extension and how. The handbook asks that requests come early.
Fifth, prepare your people. The staff does not allow recording or AI notetakers, so brief interviewees in advance and have a person take notes.
Sixth, self-assess. The handbook asks registrants to disclose known issues relevant to the exam. List what you already know, fix it, and keep a dated record of the fix. Check your claims against the marketing rule, and compare any fee or expense practice with your fund documents.
Seventh, calendar the response clocks. Put the 30-day deficiency response and the 180-day disposition letter window on a shared calendar with a named owner for each.
Eighth, decide in advance how you will request confidential treatment under Rule 83, so that the request goes in with the first production instead of after it.
Why LPs will care
Limited partners ask about examination history in due diligence, and a manager that can show an organised exam process is easier to diligence. Our guide to the LP diligence pack covers the documents LPs request. The handbook arrives in a busy stretch: the SEC has also proposed changes to performance fees, and the earlier capital call enforcement case shows what the staff looks at in practice. Fund managers can see how LPs are screening managers.
This is general information and not legal advice; speak to qualified counsel about your own situation.
FundLinx Intelligence | FundLinx.ai