Firms regulated by the SEC or FCA must treat regulatory examinations and supervisory visits as part of their business-as-usual operations. While SEC exams are often in-depth and rigorous, FCA visits tend to be more focused but can still demand fast and accurate responses. In both cases, preparation is critical—compliance teams must demonstrate fluency in operations, transactions, and procedures under scrutiny.
According to ACA Group, a strong first step towards readiness is equipping compliance officers to present a consistent and confident narrative about the firm’s operations and regulatory responsibilities. This is best supported by a cross-functional team with access to well-organised, easily retrievable documentation. Being able to respond to requests promptly with accurate information is a strong signal of a firm’s commitment to compliance maturity.
Good data governance plays a central role in examination readiness. Regulators are likely to request a wide array of documentation—from proprietary trading data to employee transactions. Ensuring this data is easily accessible, clean, and traceable not only streamlines the process but also demonstrates operational integrity.
Compliance officers should expect to be asked about the firm’s two most recent annual reviews and show how issues were resolved. They should also be familiar with the latest regulatory alerts, as these often inform the line of questioning. For SEC-regulated firms, previous examination letters and updates to Form ADV should be reviewed to ensure any past issues have been addressed transparently.
The examination process typically begins with a document request. For SEC-regulated firms, a model exam letter published in a Division of Examinations risk alert gives insight into what regulators expect. The FCA also publishes guidance on thematic reviews and its supervisory approach. Reviewing these resources in advance helps firms anticipate the scope and focus of inquiries.
Requested materials can vary from trading strategies and marketing materials to detailed compliance records. Responses should be tightly scoped to what’s requested—avoiding oversharing while ensuring accuracy. All materials must be checked for completeness and clarity before submission.
Once the exam or visit begins, firms should provide a clear explanation of their business and compliance practices. This is not the time for promotional messaging—instead, firms should deliver plain, evidence-backed documentation that meets regulator expectations. Quick, accurate document production enhances credibility. If ad hoc document requests are made, firms should ask for these to be formalised in writing to track what has been provided.
Keeping a dedicated copy of all submitted materials helps maintain internal oversight and continuity. It’s important to remember that regulators are not there to be won over—they’re looking for gaps. A professional, respectful tone must be maintained throughout.
Open communication is essential. Compliance teams should regularly update internal stakeholders and maintain dialogue with regulators. Any questions that cannot be answered immediately should be followed up as soon as possible—delays without communication can be seen negatively.
Regulators understand that issues arise in any firm. What matters is how the firm responds. Demonstrating how problems were addressed—especially through systemic improvements—can positively influence the regulator’s view.
Answering tough questions with honesty and clarity is non-negotiable. It’s better to request time for research than to guess. If a question is not applicable to the firm, it’s perfectly acceptable to say so. Where needed, firms can ask regulators for clarification.
Ultimately, regulators are people too. How firms engage during the exam—through professionalism, responsiveness, and transparency—can strongly shape the outcome. Being cooperative is not only a regulatory expectation, but a strategic advantage in managing compliance risk.
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