Compliance Considerations for Firms Reporting to the SEC or FCA

Preparing disclosures, reviewing marketing activity, and providing training about compliance concerns are all important parts of a compliance program. However, these items can often be overlooked. Here are some helpful tips to ensure they are an integral part of your U.S. Securities and Exchange Commission (SEC) or UK Financial Conduct Authority (FCA) compliant program.

Establishing an effective process for preparing disclosure

Ensuring that a firm’s disclosure is complete and accurate is a key objective of any compliance program. Disclosures meet regulatory requirements and serve to help clients and prospective clients understand the firm, its services, and the risks associated with those services. Accurate disclosure is also essential for managing a firm’s conflicts of interests.

Compliance officers can play a valuable role in preparing the firm’s disclosure by using their stakeholder management skills to be sure that all relevant parties review the disclosure for accuracy and completeness. Partnering with the firm’s counsel can help make sure that the extensive knowledge housed in the compliance department is reflected in the story that the disclosure tells about the firm, its conflicts, and its controls.

Compliance controls for marketing activities

Compliance assurance includes a critical evaluation of your marketing materials. This process requires adopting the perspective of an SEC examiner or FCA supervisor and scrutinizing your content accordingly to determine if a marketing professional’s reasonable content could potentially be seen as misleading or inappropriate from a compliance standpoint. Hence, a compliance team should review all marketing materials prior to their distribution or approve templates that the marketing team can customize without significant regulatory risk.

When evaluating marketing materials, third-party audits for compliance assurance can uncover concerns previously overlooked. Such audits, when executed by credible firms, can offer critical insights, helping to flag potential issues before they escalate.

Working with firms that provide technology and managed services can further streamline this process. These firms offer solutions that can automate compliance checks and manage large volumes of marketing content efficiently, ensuring that every piece adheres to the latest regulatory standards. By leveraging both consultants’ technological tools and their compliance expertise, firms can reduce the chance of errors and free up internal resources for other tasks. As an added benefit, adding consultants can help marketing maintain its publication schedules.

Strengthening compliance through training

Training forms another key component of a well-rounded compliance program. Instead of inundating employees with extensive training sessions, consider disseminating the information in smaller, more manageable sessions tailored to specific audiences. Involving supervisors in the training process can also be advantageous as they can offer valuable input and help underscore the importance of compliance.

Some compliance training is well-suited to be delivered via emails spotlighting specific sections of the compliance manual. E-learning and recorded training are other useful tools.

Firms may consider testing to demonstrate employees’ familiarity with policies and procedures.

Partnering with external compliance trainers who specialize in this field can further enhance your training program. By keeping training fresh and relevant, external trainers can help maintain employee engagement and reduce the chance of outdated practices that could lead to regulatory breaches.

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