According to our latest survey of compliance professionals, 44% of firms use email to manage the preclearance of marketing materials, and another 10% don’t preclear marketing materials at all. These statistics suggest that some firms aren’t taking advantage of RegTech to achieve marketing compliance, which puts them at a significant risk. Rather than be treated as an afterthought, marketing compliance should be a vital part of any firm’s compliance strategy.
Financial firms have an obligation to share factual information in marketing materials, including fundraising documentation, thought leadership articles, social media posts, and employee speaking engagements. As we’ve written in the past, the failure to maintain business communications records is one of the most prevalent SEC violations. Misleading or inaccurate information, as well as missing documentation, can lead to severe sanctions, which is why it’s crucial for firms to implement a streamlined process to manage all relevant communications.
Firms that don’t prioritize marketing compliance, or those that rely on outdated manual processes like email, are less likely to keep track of what’s being approved for publication. This makes more room for error, and can result in higher penalties. To reduce risk, a better approach is to leverage compliance software so that marketing materials can be precleared and documented within a single system. Below, we highlight three best practices to help you get started.
3 Ways RegTech Makes Marketing Compliance More Efficient
- Rather than rely on email, RegTech enables you to easily build custom workflows that automate and simplify the preclearance and documentation of marketing materials.
- Instead of keeping track of scattered files, you can store all important marketing materials, such as standard investor presentations, in a single document repository to ensure quality and version control.
- You can access a comprehensive audit trail of all marketing materials for easy reporting during examinations, and to comply with books and records expectations. The SEC’s Investment Advisers Act requires maintenance of books and records for five years, and marketing materials fit within the scope of the SEC’s definition of books and records.