By James Bowden 

A securities offering which I worked on recently required me to communicate frequently with a representative of a Self-Regulatory Organization (SRO). As all things are for a new attorney, it was a learning experience. Here are seven little nuggets of wisdom that I took away from the experience. [I know, “not another list!”]

1) Be prompt (because the person you will be working with will be). I’ll admit that I was skeptical when I sent the first package of correspondence to the catch-all SRO email address; I figured that I wouldn’t hear back from them for weeks, if at all. Wrong: I sent the first email late in the afternoon and a voicemail was waiting for me when I arrived at the office the next morning (see #3). Throughout the process I found that I could expect a response consistently within two hours. How often do you hear back from opposing counsel in two hours? Probably not often. Also, if you are a securities practitioner and your caller ID registers a 202 area code don’t let your assistant answer for you. It’s the Feds -  pick up the phone!

2) Do your homework. Know every aspect of the issue you are working on and every law/regulation/rule implicated. Believe me, your regulator does know, and they will call you, on the phone (see #3), and ask you about every single law/regulation/rule that you overlooked. “UHHHMMMMM …” is not a particularly satisfying answer. Oh, and DO NOT ask your regulator if there is any law, rule, or regulation that allows you to do what you are trying to do – and if you do, don’t be surprised when the answer is “No.” Or worse.

3) Forget about email. It sounds strange in our email-based world, but regulators use the telephone. I only received three emails from the SRO over the course of the deal: two stating simply, “thanks,” and one confirming that the review was complete.

4) Silence is not consent. Don’t try to pull the old, “If I don’t hear otherwise, I’m going to assume that you are cool with all of this.” Trust me, your regulator will not be cool with all of this

5) Do not seek approval. At least as far as securities regulators go, regulators do not  “approve” of anything. They are like the father of every woman I’ve ever taken on a date. They may not have an objection. They may agree to take no action. But they do not “approve.”

6) Don’t play hard-to-get. Regulators are not supposed to be obstructionists – you shouldn’t be one either. Work through the issues they raise with them. They are listening. Good tip: lead off by explaining your understanding of the laws, rules, or regulations and then confirm that your regulator shares the same understanding. Here’s another good tactic: when they ask you a question, try to restate their question as you understood it before you try to respond. This has the double benefit of giving you time to think about the answer and making sure that your answer will be responsive without being overly broad.

7) Be polite. OK, I learned that one in kindergarten, but I still think it is important. Here’s the thing – regulators tend to be underpaid and overworked. Sympathize with them. Or, if you aren’t the sympathetic type, commiserate with them over the weather. They had to commute across the frozen tundra this morning just like you did. The conversation will make both of your days that much more enjoyable.