Exams Aren’t Episodic Anymore
For decades, SEC exams followed a predictable rhythm. Firms treated them like events, something you prepared for in waves. Policies were updated. Binders were dusted off. Last-minute reviews happened in the weeks before an examiner arrived. Compliance was a posture you adopted temporarily.
That mental model no longer fits.
The scale of recent SEC enforcement makes this shift unmistakable. Since December 2021, the SEC has fined over 100 firms a total of more than $2.2 billion for recordkeeping failures. In a single enforcement wave in August 2024, 26 firms paid a combined $393 million for the same violations.
The 2024 Investment Management Compliance Testing Survey found that 83% of advisers had undergone or were undergoing an SEC examination in the prior five years, and 59% identified off-channel communications as their top compliance concern. The message regulators are sending is clear: compliance is no longer a periodic event. It’s infrastructure.
Modern SEC exams are less about a moment in time and more about how a firm operates every day. Examiners aren’t just asking, “Do you have a policy?” They’re asking, “Show me how this policy actually lives inside your business.” They want to see how communications are captured, how conflicts are flagged, how supervision occurs, how issues are escalated, and how a firm can reconstruct what really happened, without guesswork.
In other words, regulators are no longer evaluating preparation. They are evaluating the design.
The SEC’s 2026 exam priorities make this shift unmistakable. They reveal a new core expectation: compliance is no longer a layer on top of operations. It is the infrastructure.
Exams now test systems, workflows, and evidence. They test whether compliance is something a firm does from time to time or something a firm is built to do by default.
For advisors and broker-dealers, this changes the entire posture of readiness. The question is no longer, “Are we ready for our next exam?” It is, “Is our firm built in a way that makes us exam-ready every day?”
What the SEC’s 2026 Priorities Really Signal
The most important change isn’t a single rulem it’s a posture. The SEC has moved from evaluating intent to validating reality.
From Policies to Proof
In the past, exams often revolved around whether a firm had the right documentation. Today, they focus on whether the firm can demonstrate behavior. A written policy is no longer the endpoint. It’s the starting line.
Examiners increasingly probe how things actually work:
- How are communications reviewed in practice?
- Where does supervision occur?
- How are marketing materials approved and tracked?
- How are conflicts identified and resolved?
The exam question has become: Can you show that what you wrote is what you do?
Data Is Now the Evidence
This shift elevates data from a background requirement to a central artifact. Records are no longer passive storage. They are the audit trail of truth. Firms are now expected to reconstruct reality—what happened, who knew, when it was reviewed, and what action followed.
That expectation alone reshapes what “good compliance” looks like. It’s no longer enough to say, “We have a process.” Firms must be able to demonstrate that the process ran, that it produced an outcome, and that the outcome was appropriate.
Technology Is a Risk Surface
At the same time, technology has become a regulatory surface. AI tools, remote work, digital communications, and cloud platforms now shape how advice is delivered. The SEC is responding accordingly. Exams increasingly explore how risk enters a firm’s systems and what controls exist to prevent mistakes before they happen.
The subtext is clear: infrastructure maturity is now a compliance issue.
The SEC isn’t just asking, “What are your rules?” It’s asking, “What does your environment allow—and what does it prevent?”
Why Legacy Compliance Models Are Breaking Under Exams
Most firms still operate on a fragmented stack. Advisors live in one system. Archiving happens somewhere else. Approvals run through email. Audits live in spreadsheets. Policies rely on manual attestations.
Each tool may work well on its own. Together, they create gaps.
The Silo Problem
Those gaps are bridged by people like memory, judgment, and good intentions. That worked when exams focused on documents. It falters when exams focus on behavior.
What Examiners See
From the outside, fragmentation looks like:
- Delays in producing records
- Inconsistent versions of the same event
- Gaps between communication and supervision
- “We believe this happened” instead of “Here’s the timeline.”
Exams expose the seams. What feels manageable internally becomes visible externally as risk.
The Hidden Cost
The hidden cost is that compliance becomes retrospective. Issues are discovered after the fact. Evidence is reconstructed. Context is inferred. Firms react.
Modern exams penalize that posture. They favor environments where behavior is shaped in advance rather than corrected later. Fragmentation doesn’t just slow firms down—it turns every exam into a fire drill.
And the pressure compounds. As firms grow more distributed and communication becomes more digital, the surface area for risk expands. Every disconnected system adds friction. Every manual handoff adds uncertainty. Every spreadsheet becomes a potential single point of failure.
What once felt “good enough” now feels fragile under regulatory scrutiny.
The Shift to Operational Compliance
A new mental model is emerging: Compliance is no longer a department. It’s an operating system.
Evidence of this shift comes from how firms are already responding. The 2025 Investment Management Compliance Testing (IMCT) Survey reports that advisers are increasing both targeted testing and mock SEC examinations, particularly around AI, electronic communications surveillance/off‑channel communications, cybersecurity, AML, and the marketing rule. Rather than waiting for examiners to uncover gaps, compliance teams are using these mock exams and focused reviews to surface control failures and design flaws inside their own systems.
What Operational Compliance Looks Like
Operational compliance means that rules are enforced by design. Policies don’t sit in binders; they live inside workflows. Supervision happens in real time. Records are generated automatically. Escalations are system-driven. Evidence exists before anyone asks for it.
In this model, compliance isn’t something you “do” periodically. It’s something your business produces continuously.
Think of it the way you think about financial controls. You don’t rely on people to remember not to double-spend. You design systems that prevent it. Operational compliance applies the same logic to regulatory risk.
The goal is no longer to prepare for exams. It’s to operate in a way where exams become verification, not excavation. That’s a profound shift. It moves compliance from the periphery of the business into its core architecture.
What an Exam-Ready Firm Looks Like in 2026
Picture a firm where:
- Every client interaction leaves a trace
- Communications are supervised where they happen
- Marketing materials flow through structured approval paths
- Outside business activities follow defined workflows
- Branch audits are standardized and tracked
- Complaints are logged, escalated, and resolved in-system
- Supervisors can answer, Who knew what, and when?
Nothing depends on memory. Nothing waits for reconstruction. The system itself becomes the record. Readiness is continuous, not episodic.
For many firms, that kind of environment requires re‑architecting how non‑trading compliance actually runs. This is where platforms like Patrina matter: instead of stitching together email archives, spreadsheets, and point tools, firms can centralize supervision, communications archiving, audits, marketing approvals, complaints, and OBAs in one system designed to be “exam‑ready by default.”.
When an examiner asks a question, the firm doesn’t scramble. It doesn’t email three vendors. It doesn’t assemble timelines from inboxes. It shows what already exists.
This is what the SEC’s priorities are quietly pointing toward: a world where compliance is built into the fabric of the business. Where firms don’t have to prove how they operate, because how they operate is already visible.
A Self-Assessment for Advisors & Compliance Leaders
Ask yourself:
- Can you reconstruct an end-to-end client interaction?
- Can you show when a supervisor intervened?
- Can you prove how a policy is enforced—not just written?
- Can you produce records without coordinating across vendors?
- Can you audit a remote rep without flying someone out?
These aren’t theoretical questions. They are exam questions in disguise. Each one reveals whether your firm is merely compliance-aware or compliance-built. They also reveal something deeper: whether compliance is something your team remembers to do, or something your systems require them to do.
Conclusion – Exams as a Design Problem
The SEC isn’t just enforcing rules. It’s reshaping how firms must be built.
The new core of compliance is:
- Unified systems
- Embedded controls
- Real-time supervision
- Continuous evidence
The scale of recent SEC enforcement reinforces this urgency. In fiscal year 2024, the SEC reported $8.2 billion in total financial remedies across 583 enforcement actions, the highest dollar total in the agency’s history. Within that record, the Commission has continued to bring large, coordinated actions against firms that failed to meet their recordkeeping and supervision obligations. The firms involved range from global institutions to smaller advisers, but the pattern is the same: fragmented systems, gaps in supervision, and exams or investigations that exposed those weaknesses.
Exams are no longer about what you say. They’re about how your business behaves. For advisors and broker-dealers, this is an invitation as much as it is a warning. It invites firms to stop treating compliance as an episodic burden and start treating it as a design problem—one that can be solved through architecture, not anxiety.
The firms that pass tomorrow’s exams won’t be the ones with the thickest binders. They’ll be the ones whose systems make compliance unavoidable.
That’s the design goal behind Patrina for advisors and broker‑dealers: a single, non‑trading compliance platform where archiving, supervision, audits, marketing review, complaints, and OBAs all run on defined workflows. When those workflows produce complete records and audit trails as a by‑product of daily business, exams become verification instead of excavation.
FAQs
- What’s actually new about the SEC’s 2026 exam priorities?
What’s new isn’t a single rule—it’s the posture. The SEC is moving away from “policy existence” toward “operational reality.” Exams now focus on whether your firm’s systems and workflows actually enforce the rules you’ve written. - Does this mean small firms will be held to the same standard as large firms?
Expectations scale with size, but the direction does not. Regardless of firm size, regulators now expect you to demonstrate how compliance happens in practice. Smaller firms often feel this more acutely because manual processes don’t leave consistent audit trails. - Why are systems and workflows suddenly so important?
Because modern risk lives inside them. Communications happen in chat tools, advisors work remotely, and AI is entering daily operations. Regulators now examine how your systems prevent mistakes before they happen—not just how you respond afterward. - Is this just about recordkeeping?
No. Recordkeeping is only one layer. The SEC is examining how records connect to supervision, escalation, and resolution. It’s not enough to store data—you must be able to show how decisions were made, and risks were addressed in real time. - What does “operational compliance” really mean?
It means compliance isn’t something you do periodically—it’s something your business produces continuously. Policies are embedded in workflows, supervision occurs automatically, and evidence is available before anyone asks for it. - How should firms prepare for this shift?
Start by mapping how compliance actually happens today. Identify where humans bridge gaps between systems, where memory replaces evidence, and where processes break under pressure. Those seams are what exams increasingly expose. Preparation now means redesigning operations—not just updating documents.
