Surviving a Regulatory Exam: The Exit Meeting and Beyond

Posted by Andrea Collatz on August 1, 2013

You’ve made it to the exit meeting of your regulatory exam, but the process isn’t over yet. Below you’ll learn what you can expect from the final meeting and how to remain compliant in the future.

At the exit meeting

At the exit meeting you can expect to have the preliminary findings on the key issues identified. You can also expect a request for commitment on corrections and to address points of disagreement. Prior to the exit meeting, speak with the examiners about what findings will be discussed during the meeting and prepare to commit to a timeline for correcting issues they find.

Some common examples of examination findings:

  • Missing or incomplete books and records
  • Missing disclosures in advertising
  • Performance advertising
  • No written supervisory policy for new area of business
  • Failure to follow written supervisory procedures
  • Fee schedule errors in client agreements

The final letter

The final letter should come within the time limit given at the exit meeting and should list most of what was discussed at the meeting. It will not list all issues discussed during the exam. Strive to have most of the corrections completed by the response date and remember to address the specific points in the final letter.

Making corrections that work for the firm

Corrections should not just create busy work for the firm, but should fix the issue and the root cause. Consider the workflow of the firm when making corrections to ensure that the corrections are sustainable long-term. Add corrections into existing process when possible instead of creating a new duty. Reduce the element of human error by automating when possible and avoiding single point of failure. Track the issues and ensure corrections are completed. With these guidelines, you are on your way to avoiding long-term issues.

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Comments

Thanks for this post-- very helpful!