SEC and FINRA Pay-to-play can be tricky for even the most experienced of Compliance Officers. Now is a great time of year to review your compliance programs for any potential weakness.
To help, here are 4 Tips to Building a Better Pay-to-Play Compliance Program.
1. Review your employee training.
One best practice that we hear again and again at MCO is to review your employee training. All of your employees must know and understand your firm's rules. For a strong program, your employees should know what they can do. You also need to make sure they understand what they cannot do. Good training is a fundamental step towards reducing employee conduct risk.
2. Leverage technology.
At compliance conferences, speaker will often say that in this day and age, no technology is often seen by regulators as a red flag. You don't need technology for your program, but it can absolutely help. When looking to increase efficencies, it helps to have the right tools. This can go beyond MCO, although we encourage you to use our solution. This can include email surveillance on political contributions, using a website where you can track if any political contributions were given, and more.
3. Remember new employees too
Firstly, new employees should be trained in, attest to and follow your policies. Considering new employees becomes especially important if your firm allows political contributions. As a Compliance Officer, you should be sure that a new employee did not contribute to a potential client in the past. You will also need to consider this for employees that are promoted.
4. Consider requiring pre-clearance
Even with strong training and the best of intentions, the rules can be confusing for employees. Consider requiring them to preclear political contributions. As the Chief Compliance Officer, you can make sure there are no conflicts. Fortunately, software solutions like MCO make the preclearance process easier than ever.
Insights for this post are from our 2017 Webinar with Todd Cipperman of Cipperman Compliance Services. View the full Webinar here.
Interested in more insights? Sign up for our upcoming Webinar with Jennifer Lin of DLA, LLC.
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