If you’re compliant and you know it…Tell the regulators

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If you’re compliant and you know it…Tell the regulators

If you’re compliant and you know it, don’t just clap your hands! Tell FINRA. That’s the advice FINRA’s Susan Axelrod shared at the Agency’s recent 2015 Conference in Washington, DC.
“If I were a firm that had a great conflict management process that I continued to tweak,” she told conference attendees, “one I tried to make sure was consistent with best practices, I’d be proud to tell the regulators. I’d say, ‘Here are the five things we’ve done this year. Here’s our practice. Here’s our processes.’ And then I’d say, ‘We think we have handled this well.'”

Share your good news

According to Axelrod, the regulators are seeing a lot of sharing of good news from many firms as part of the regulatory and examination process. “They were very proud to come to talk to us,” she said.

So, she advises firms still struggling with compliance, not to ask themselves simply, “‘How do you prepare?'” Rather, she says:

  1. Identify the right things to do;
  2. Ensure you have a process to identify conflicts;
  3. Monitor and update those processes;
  4. Have a mitigation plan in place; or
  5. Eliminate conflicts that you don’t necessarily think are appropriate.


Axelrod also advised firms to look at their product management piece and the related separation demarcations, systems, and processes. “Look at how you compensate folks, and be able to talk about and manage conflicts there [too].”

Bottom line, if you are doing the right thing, Axelrod says to make sure the right people know.

Of course, to “talk the talk; one has to walk the walk.” That means, having appropriate processes and procedures in place so you have something good to talk about with the regulators. That’s where teaming with a trusted partner like Patrina comes in handy. We’re independent, third-party, outsourced compliance muscle, you call in as reinforcements. Pick up the phone. Talk to us. Open the lines of communication to help you ensure all your processes and procedures are in place and functioning smoothly. Ask about our comprehensive regulatory archival and compliance solutions specifically designed for CEOs and CCO’s at Broker/Dealers, RIAs, and FCMs. Or…when the regulators come calling, you could have nothing to talk about…

Let’s talk (212- 233-1155).