How should communication with regulators be approached?

Frequent and proactive communication with regulators is essential in ensuring compliance and maintaining a transparent relationship. This approach allows organizations to stay ahead of regulatory expectations and fosters an environment of trust and cooperation. By engaging regularly with regulators, firms can better understand evolving requirements, share relevant developments in their operations, and seek guidance on complex issues. This proactive stance helps to minimize misunderstandings and potential compliance risks, while also enabling firms to demonstrate their commitment to adhering to regulations.

Utilizing minimal contact until necessary, only responding when regulators reach out, or relying on technical jargon can lead to a lack of clarity and may raise suspicions or concerns among regulators. These approaches can result in reactive rather than proactive compliance practices, which can be detrimental for organizations operating in a heavily regulated environment. In contrast, an ongoing dialogue with regulators supports a stronger compliance framework and strengthens the overall relationship between the industry and regulatory bodies.