Depending on the type of registrant, applicable rules may require annual, biannual or other periodic training either for all employees or a subset (e.g., the Associated Persons of CFTC registrant). New employees must usually also acknowledge receipt and understanding of the firm’s policies and procedures and make other disclosures upon hire. In this second of two articles on compliance education, we provide tips for both periodic formal training and ongoing outreach to employees. See our previous article for CCOs to stay informed of regulatory developments and other tools.
- Annual or other periodic training can take a few different forms; below are some suggestions:
- It can be particularly effective to schedule the training during a regular firm meeting, which will ensure that the majority of employees can attend (but be sure to follow up with anyone who was absent);
- Carefully crafted, a PowerPoint presentation will keep the trainer on track and employees engaged. Printed, it can double as a useful quick reference to take away (with the caution that it is not a substitute for reading the manual in its entirety);
- If a PowerPoint is not an option, trainers should prepare an outline for their own use in presenting the information, enabling them to keep their place in the material and manage time. The outline can also be used when onboarding new employees, providing both a quick reference and helping to keep initial training consistent;
- Consider asking outside counsel or a compliance consultant to train employees on key issues such as insider trading. These service providers are often extremely well-versed in the details of notable cases and these examples can help employees understand the nuances.
- In addition, CCOs can find ways to reach out to employees throughout the year, including:
- Having time set aside for compliance matters at regular firm meetings;
- Distributing email reminders of preapproval requirements and other issues (tip: change these seasonally as relevant issues come up, such as emphasizing prohibitions on/approvals of political contributions at election time, or gift disclosures/approvals around the holidays);
- Distributing regulatory news of note to employees generally or a relevant subset;
- Ensuring that they are visible and available within the firm. For example:
-CCOs may spend some part of their workday sitting at the trading desk, or with other key groups such as client/investor relations or operations.
-Others make a point of circulating around the office and/or;
-Keeping their doors open except when needed for confidentiality reasons and keeping candy or snacks in their office to encourage employees to drop in, whether to ask compliance-related questions or generally catch up.
Finally, particularly for formal trainings, CCOs should keep sufficient records to show the content of the training (the PowerPoints and outlines are handy here) and the attendees. In the latter case, sign-in sheets and/or certificates of attendance will suffice. If the meeting is being recorded, a roll call would work especially well for small groups (less so for very large groups as it may delay the substantive portion of the meeting). Calendar entries may be helpful, but are not a complete record as they do not show that a particular person attended.
In terms of ongoing outreach, the email reminders described in Section 2, create documentation of ongoing continuing education for employees.
For initial trainings, CCOs will collect the acknowledgements and disclosures required by the firm’s policies and procedures. In addition, many keep a spreadsheet or other documentation that an orientation took place (again, the outline, PowerPoint or other reference tool and calendar entries will be helpful here, though not a complete record on their own).
Feel free to share other tips regarding employee training and outreach in the comments!