Effective Pushback
Getting a Regulator to see Reason
Without Triggering WWIII
Presented by Stephanie A. McManus LL. B.
Compliance Support Services
June 2, 2011
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Meet Cody
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What’s Required
1. Understanding Perspective
2. Keep the Goal in Mind
3. Establishing Trust and Rapport
4. Patience
5. Resolution and Follow-up
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Understanding Perspective
1. Horses are prey animals, motivated by
fear of being eaten by a predator.
2. Regulators are protectors of the
public and motivated to fulfill that
mandate in a visible way. So they have
two fears:
 The public will be harmed by your actions or
inactions;
 The Regulator will be held accountable for not
having prevented the harm.
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Understanding Perspective
1. Horses are herd animals and will only
relax and feel safe when they have a
strong and competent leader.
2. Regulators are public servants. They
will only feel they’ve kept the public safe
and be able to relax when you’ve shown
leadership and know what you’re doing
in compliance.
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Understanding Perspective
Their perspective has nothing to do with
you.
You need not take things personally –
just get down to solving the compliance
problem and getting back to your
business.
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Understanding Perspective
 Staff shortages
 How happy your advisors are or how
much money your firm made.
 Cost of responding
 Technical problems
ALL HAVE ONE THING IN
COMMON....
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Understanding Perspective
THE REGULATORS DON’T CARE!
If anything, focus on these irrelevant matters
will be a red flag to them that you haven’t got
the infrastructure, resources or compliance
culture needed to keep the public safe.
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Keep the Goal in Mind
“The object is to impose the handler's will
without provoking an unmanageable
confrontation with the horse.”
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Keep the Goal in Sight
What is an unmanageable confrontation with
a regulator?
It’s when they pull out the full weight of their
authority to force you to address the issue
the way they want you to.
YOU CANNOT WIN, if it gets to that point.
So don’t let it get to that point.
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Keep the Goal in Mind
Answer their concerns:
Address the investor protection issue
cleanly and decisively and ensure there’s
no way this is going to come back and bite
them.
And do it requiring the least amount of
effort on their part possible. Solve their
problem.
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Establish Trust and Rapport
Trust is the foundation for all good relationships.
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Establishing Trust and Rapport
1. Do not be defensive.
2. Listen to them, without interruption.
3. Really understand their concern –
top to bottom, back to front. (Hire
someone to do this if you can’t see it).
4. Speak to the senior person – just
trying to do a job – and demonstrate
that you understand the issue. Have a
conversation.
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Establishing Trust and Rapport
Solve their problem with a process or
solution that works in your setup.
 Be very detailed.
 Make reference to the rules or
regulations.
 Show you’ve read other cases or
material that’s relevant to the issue.
 Do the work now - it will save you work
and time and money down the road.
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Patience
1. The Regulator does not understand your
business like you do, so don’t expect them to.
2. Sometimes junior staff with very little
understanding of your business will be assigned
to work with you. You may spend more time
educating them than fixing your problem. Too
bad. That’s part of fixing the problem.
3. Remember that every hour you invest in
resolving this problem is a deposit in your
goodwill bank account with the regulator,
available for future use.
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Resolution and Follow-up
 Once you come up with the solution you think will:
a) solve their problem
b) work within your business
…give the whole thing to them in a face to face
meeting.
Take the time. The bigger the issue, the more
important it is to address it face to face and early.
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Resolution and Follow-up
 Maintain the Relationship over time
 Think of them as one of your main business
contacts. They have the power to:
Shut you Down now
Snuff out Your Future in the business
So Keep them top of Mind
 If you make business changes, notify them. Not
just on NRD but also, the regulatory staff person
responsible for your file.
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Outcome
Stacey Westfall
Championship Ride
Questions?
www.compliancesupport.ca
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