Compliance training advised for IR teams

Marketing materials must be SEC-compliant, so it makes sense to train its authors, say panelists at PEI’s Private Fund Compliance Forum.

Investor relations professionals should undertake compliance training to streamline the sign-off on marketing materials, according to panelists speaking at PEI's Private Fund Compliance Forum in New York.

Documents, including quarterly reviews, deal memos, private placement memoranda and flip books can be examined by the Securities and Exchange Commission, so it is essential they tick all the compliance boxes, one chief compliance officer said.

One CCO from a US-based mid-market firm said marketing materials created by the IR department go through the compliance team, but the IR team is trained to recognize issues the CCO might raise in those materials.

“We centralized the IR focus into one person and she is well-trained to understand compliance issues related to marketing materials,” the CCO said.

Training has reduced much of the back-and-forth dialogue between the IR and compliance teams over specific points or concerns in marketing materials, they added.

“I don't find we are having those discussions as we used to have to do,” the CCO said. “Now they get that we are just doing our job, and it's not so much a battle now.”

A general counsel at another mid-market firm agreed it was practical to give the IR team compliance training.

“We trained our IR people enough that they'll know what I'm going to be looking at [when reviewing marketing materials],” he said. “Working with each other over and over helps you develop some expectations [on what could be raised as a concern].”

Marketing reviews remain a collaborative effort with just under two-thirds of delegates saying multiple reviewers sign off on such documents. Only 22 percent said it was the sole responsibility of the compliance team.