COMPLIANCE READINESS
Compliance Readiness Guide for Regulatory Examinations
What regulators are actually looking for in technology governance examinations — specific to SEC, FINRA, or HIPAA.
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SEC examinations begin with a document request. Your ability to respond completely and quickly sets the tone for the entire examination. This guide covers how SEC examinations are scheduled, what technology documents are consistently requested, what examiners actually evaluate beyond the documents, and the highest-risk areas in the current examination cycle — so you are ready before the notice arrives.
1. How SEC Examinations Work
Understanding SEC examination methodology is the foundation of exam preparation: • Risk-based selection: Firms with complaints, material events, or flagged risk indicators are examined sooner and more intensively. • Routine cycle: Most registrants are examined on a 3-7 year cycle depending on size and risk profile. • Cause examinations: Triggered by complaints, breach notifications, whistleblower tips, or industry sweep topics. • Division of Examinations annual priorities translate to technology examination focus areas. The most common exam failure is the gap between policy and practice. Written policies describe controls that don't exist in operation. Examiners find this within hours.
2. Standard SEC Technology Document Requests
Eight consistently requested technology documents: • Information security policy: current, dated, and signed by senior management. • Incident response plan: tested within prior 12 months with tabletop exercise results. • Vendor list and agreements: inventory of all third parties with access to customer data with security provisions. • Cybersecurity risk assessment: most recent, with identified gaps and remediation status. • Penetration test results: most recent external penetration test or vulnerability assessment. • MFA evidence: deployment reports showing MFA on all required systems. • AI inventory: if applicable, all AI tools with use-case descriptions and governance documentation. • Books and records compliance documentation: WORM storage verification and retention configuration.
3. What SEC Examiners Actually Evaluate
The three tests beyond documents: • Policy vs. Practice: Examiners interview staff to test whether written policies reflect actual operations. Inconsistency between written WSPs and staff descriptions of daily operations is the most common technology finding. • Currency: Dated evidence is critical. Policies from 3+ years ago without update, risk assessments older than 12 months, and untested BCPs create immediate exam exposure. • Technical Evidence: Examiners increasingly request technical artifacts — not just policy descriptions. MDM compliance reports, patch status dashboards, MFA enrollment reports, and access review logs are the evidence that policies are enforced.
4. High-Risk Areas in Current SEC Examinations
Based on recent SEC examination findings and enforcement actions: • AI governance: SEC is actively asking about AI use, governance frameworks, and conflict of interest analysis. Firms without an AI inventory are starting from a deficit. • Reg S-P 2024 compliance gaps: The amended rule requires 30-day customer notification. Many firms have not updated their incident response procedures to meet this timeline. • Cybersecurity incident disclosure: Public companies face the 4-business-day material incident disclosure requirement. Materiality determination procedures must be documented and tested. • Vendor risk: SEC examinations consistently probe vendor oversight. Missing SOC 2 reports and vendor contracts without security provisions are common findings. • Books and records format compliance: WORM storage requirements for electronic records. Non-compliant storage is a per-record violation.
5. The SEC Examination Evidence File
Eight-document standing evidence file maintained continuously and producible within 24 hours: ☐ Written cybersecurity and technology policies: current, signed, version-controlled ☐ Most recent cybersecurity risk assessment with remediation status ☐ Incident response plan with most recent tabletop exercise results ☐ Vendor inventory with due diligence documentation for critical vendors ☐ Technical control evidence: MFA reports, encryption verification, patch status ☐ Access review records for customer data systems ☐ Training records: completion logs with dates and topics ☐ AI inventory and governance documentation (if applicable)
6. SEC Compliance Readiness Checklist
Eight-point pre-examination checklist confirming all policies are current, all evidence is available, and all prior findings are remediated: ☐ All technology policies reviewed and signed within prior 12 months ☐ Cybersecurity risk assessment current with no unaddressed critical findings ☐ Incident response plan tested within prior 12 months ☐ All prior SEC examination findings fully remediated with documentation ☐ Vendor due diligence files current for all critical technology vendors ☐ Staff briefed on examination protocols and document preservation ☐ Standing evidence file assembled and verified complete ☐ Single examination point of contact designated with authority to produce documents
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