Regulation BI and Form CRS – Early Regulatory Exam Experiences
On April 7, 2020, the SEC’s OCIE department issued Risk Alerts covering expectations concerning the scope and content of initial Reg BI and CRS examinations, stating that it would look for “good faith efforts” to comply with these new regulations. FINRA has echoed the SEC’s approach. The regulators have indicated they would provide coordinated guidance to firms that met the good faith compliance threshold but had areas in need of improvement.
We will explore if early exam experiences are in-line with the SEC’s stated approach and if there are any early lessons learned from the Reg BI and Form CRS exam experiences. The panel will include both a “boots on the ground” perspective and an outside counsel’s views on areas of SEC interest.
Clifford E. Kirsch
A seasoned securities lawyer with more than 30 years of regulatory, corporate counsel and private practice experience, Clifford Kirsch focuses his practice on investment management, where he regularly counsels clients on the comprehensive regulations governing advisers and broker-dealers, bank fiduciaries, pooled investment vehicles (including mutual funds, managed advisory accounts, bank collective investment funds, and retirement and insurance investment products), and the retirement marketplace.
Cliff advises many of the most prominent US dual-registrants (entities that are registered as both advisers and broker-dealers) with respect to the sale and distribution of investment products, compliance and supervisory procedures, and sales practice issues. A former chief legal officer for one of the country’s largest dually registered broker-dealer/advisers, Cliff routinely guides clients through US Securities and Exchange Commission, Financial Industry Regulatory Authority and state securities departments in connection with regulatory and examination matters. Cliff also works regularly with the preeminent securities, retirement and insurance industry trade associations, and serves as policy counsel to the Financial Services Institute.
A 23-year veteran of the Securities and Exchange Commission (SEC), John Walsh joined Eversheds Sutherland (US) in October 2011. With his deep, insider’s experience and perspective of the SEC, John now represents broker-dealers, hedge funds, investment advisers and other securities firms in compliance and regulatory issues involving the agency. He counsels clients on the full spectrum of securities issues from development and compliance to cooperation in examinations and defense in enforcement proceedings.
At the SEC, John played a key role in creating the Office of Compliance Inspections and Examinations (OCIE), which administers examinations of U.S. registered securities entities. He designed and implemented the SEC’s securities compliance examination practices, first as a senior advisor for compliance policy and then, most recently, as associate director-chief counsel. In 2009, he served as OCIE’s acting director and led a massive retraining of examination staff on antifraud techniques.
Prior to his tenure at OCIE, John was special counsel to former SEC Chairman Arthur Levitt from 1993 to 1995. From 1990 to 1993, he worked in the SEC Division of Enforcement, serving first as senior counsel and then as chief of the branch of regional office assistance, where he regularly appeared before the Commission’s closed meetings to present and discuss regional office enforcement cases. He also advised the commissioners and staff on securities laws and agency policy. John began his career with the SEC in 1988 as an attorney in the Office of General Counsel.