SEC Exams: The Onsite Visit and Best Practices for Interviews with your Staff
MyComplianceOffice presents our co-hosts from NorthPoint Compliance as they discuss how to prepare your staff for interviews with the SEC and share the do and don'ts on an onsite SEC visit.
Victoria Hogan, CFA, President of NorthPoint Compliance worked for over six years as a compliance examiner in the New York Regional Office of the U.S. Securities and Exchange Commission. Victoria also spent two years as a compliance officer at Fortress Investment Group. Victoria graduated magna cum laude from The College of New Jersey.
Colleen Montemaraon is a consultant at NorthPoint. Prior to joining NorthPoint, Colleen worked for more than six years as a compliance examiner in the New York Regional Office of the US Securities and and Exchange Commission.Colleen graduated magna cum laude from St. Thomas Aquinas College with a BS in Finance.
You can download a full copy of the slides from this webinar.
Full video transcript available below:
Thank you Colleen. When Colleen and I were examiners, we primarily conducted surprise examinations where we would just show up in an investment adviser and surprise, you're being examined. Nowadays, it would be very unusual to have a surprise examination, and you would be more likely to receive a telephone call from the SEC indicating our intention to commence and examination of your firm. This is good for a number of reasons. First, if the staff will be onsite at your firm, one of the first things that you want to ask and that you should ask, is how many persons will be visiting the firm so that you can provide adequate and appropriate space for them. |
||||||||
There's a running joke that if SEC examiners are at your office, you should turn the heat on really high, or freeze them out. Although this has never happened to me as SEC examiner, I have heard some interesting stories from my former colleagues at the SEC. You want to make the staff as comfortable as you can, and if you have a smaller office and you have concerns, just inform the staff of this fact and tell them that you'll do your very best to make them comfortable, and then of course do your very best to make them comfortable. |
||||||||
Also, with advanced notice, you get the opportunity to notify all employees that the SEC will be onsite, and you can take time to sensitive them to a number of things and also set forth a number of roles while the SEC is on site. I'll give you some examples. You should tell your staff that no one should ever answer any business related questions from SEC examiners unless the CCO is present. If this were to happen to an employee of your firm, the employee should just indicate that he or she will communicate request to the CCO. You also want to impress upon the employees that it is necessary to have a clean desk policy. |
||||||||
A clean desk policy includes putting docs away and locking your computers prior to leaving workspace. Making sure that no one has post it notes around with their username and passwords on them, and also retrieving print outs from the copiers in a timely manner. In addition, you should tell employees to be cognizant of the conversations they have while they're in the public spaces in your office. You want to impress the SEC, and remind the employees to always act professionally while the SEC staff is at your office. Also engage in business conversations in private areas of the office.
|