(Article from Registered Funds Regulatory Update, April 2026)
For more information, please visit the Registered Funds Resource Center.
On February 24, 2026, the SEC’s Enforcement Division announced “significant updates” to its Enforcement Manual to “ensure greater uniformity, reflect the Division’s best practices, and improve [the S]taff’s ability to carry out the mission-critical work they do on behalf of investors.”
The Enforcement Manual includes updates to the expanded Wells process, including changes to the process itself, timelines, and oversight. The Wells process is a formal procedure through which the SEC notifies a party that the Staff intends to recommend charges against them and provides the party an opportunity to submit a written statement as to why enforcement action should not be taken. The updated Enforcement Manual also provides a clear expectation that the Staff “should be forthcoming about the contents of the investigative file,” allowing potential respondents to have more access and receive more information about evidence obtained from third parties, such as investors.
The updated Enforcement Manual also incorporates the SEC’s prior practice of “permitting a settling entity to request that the Commission simultaneously consider an offer of settlement and any related request for Commission waivers from automatic disqualifications and other collateral consequences that result from the underlying enforcement action.”
Additional updates to the Enforcement Manual include: (i) providing the Division’s procedures for evaluating cooperation in the context of determining civil penalties; (ii) updating the framework for referrals to criminal authorities; and (iii) conforming changes to the Division’s current best practices.
The Enforcement Manual was last revised in 2017 and will undergo annual reviews going forward.
SEC Press Release, SEC’s Division of Enforcement Announces Updates to Enforcement Manual
(Feb. 24, 2026), available at: https://www.sec.gov/newsroom/press-releases/2026-20-secs-division-enforcement-announces-updates-enforcement-manual.