Preparing for a Regulatory Exam: Pro Tips from Both Sides of the Table
Regulatory exams can be daunting—but with preparation, the right mindset, and a strong compliance culture, they can also be an opportunity to strengthen your program.
In NSCP’s latest Currents Live webinar, “Preparing for a Regulatory Exam,” three powerhouse compliance professionals—Kristin A. Snyder, Partner, Debevoise & Plimpton; Karen Steighner, CEO, Compliance Advisers, Inc.; and KC Waldron, CCO, Empower shared practical tips and real-world perspectives from their time both inside and outside the SEC and FINRA.
Key Highlights:
Preparation Starts Long Before the Exam Notice
Karen Steighner emphasized that the best way to prepare for a regulatory exam is to always be prepared. Keeping your compliance program active, current, and business-specific is essential, no shelf policies allowed.
First Impressions Matter
Acknowledge the exam notice promptly, set a collaborative tone with examiners, and proactively provide context through a firm profile. Be ready with space, tech, and staff accommodations.
The Deficiency Letter Isn’t the End of the World
Kristin Snyder shared that most SEC exams end in deficiency letters, not enforcement actions. But how you respond matters. Timely remediation, clear documentation, and possible policy or personnel enhancements can make all the difference.
KC Waldron’s Golden Rule: Centralize and Organize
Designate a single point of contact for all regulatory interactions and maintain a document inventory. Whether it’s FINRA or the SEC, clarity and coordination across legal, compliance, and business teams build credibility.
BD & IA Exams: What to Expect
From cycle exams to sweeps, panelists walked through the types, timelines, and expectations for broker-dealers and investment advisers. Don’t overlook tools like the SEC’s Exam Priorities and Risk Alerts. They’re your exam playbook.
AI, AML, and Cybersecurity: Watchlist Priorities
Emerging technologies and perennial risks continue to shape the regulatory landscape. Whether it's Reg BI, AML, fee disclosures, or AI use cases, staying aligned with your disclosures – and not overpromising – is critical.
Culture of Compliance is Key
More than policies, examiners look for intent. Do your people understand compliance? Do they act on it? Are you proactively improving? Examiners expect issues, but they also expect integrity, transparency, and accountability.
This panel offered a rare view into how regulators think, and how firms can stay ahead with diligence, transparency, and a firm-wide commitment to doing the right thing.
To receive valuable guidance like this and stay up to date on the regulatory issues that matter most, join NSCP today for access to Currents Live webinars and our industry-leading publication, NSCP Currents. NSCP members can access the full webinar recording here.
You can also be featured on an NSCP Currents Live webinar or in NSCP Currents, the lead compliance publication of the financial services industry. Find out how you can share your experiences, advice, and tried and tested strategies.