• Written policies and procedures and documentation of compliance are critical to the examination process. Take the time to customize off-the-shelf procedures and document compliance with those procedures. Specifically document any remediation of noncompliance, training, and periodic review and testing.
• Document the initial delivery of Form CRS and any updates.
The examination response is critical to avoiding enforcement referrals. Given the novelty of this regulatory scheme, the examination and enforcement programs likely will be forgiving of reasonable lapses that quickly are corrected by registrants. However, that same novelty also will encourage the Commission to identify more egregious failures through public enforcement action.
Paul Helms, a partner at international law firm McDermott Will & Emery and a former SEC Enforcement attorney, manages risk associated with complex securities issues. He defends clients facing SEC and government inquiries, conducts internal investigations and handles securities litigation. Emilie O’Toole, an associate at McDermott, focuses her practice on litigation matters and investigations.