FERC Policy Statements on Enforcement and Compliance: Practical Tips

1
FERC Policy Statements on Enforcement and
Compliance Practical Tips

• Steve Phillips
• Director, Compliance and Ethics
• November 1, 2008

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Policy Statement on Enforcement October 20, 2005

• Provided Guidance in the Form of Questions
• Based on Principles from SEC, DOJ and CFTC
• Good Start, but..
• In Practice, Is There a Zero Tolerance Policy?

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Revised Policy Statement on Enforcement May 15,
2008

• 5 Key Factors in Assessment of a Civil Penalty
• Seriousness of Offense
• Commitment to Compliance
• Self Reporting
• Cooperation
• Reliance on Staff Guidelines

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Policy Statement on Compliance October 16, 2008

• 4 Key Factors to Substantially Reducing - and
  Possibly Eliminating - Civil Penalties
• Role of Senior Management in Fostering Compliance
• Effective Preventive Measure to Ensure Compliance
• Prompt Detection, Cessation and Reporting of
  Violation
• Remediation Efforts
• Zero Tolerance Policy Is Not in Effect If You
  Have a Vigorous Compliance Program

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How Do You Organize Your Compliance Efforts?

• Does the Company Have an Established, Formal
  Program for Internal Compliance?
• Is It Well Documented and Widely Disseminated
  Within the Company?
• Is the Program Supervised by an Officer or Other
  High-Ranking Official?
• Does the Compliance Official Report to or Have
  Independent Access to the CEO and/or the Board of
  Directors?
• Is the Program Operated and Managed to Be
  Independent?
• Are There Sufficient Resources Dedicated to the
  Compliance Program?

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What Do You Do to Sustain Your Compliance
Program?

• How Frequently Does the Company Review and Modify
  the Compliance Program?
• How Frequently Is Training Provided to All
  Relevant Employees?
• Is the Training Sufficiently Detailed and
  Thorough to Instill an Understanding of Relevant
  Rules and the Importance of Compliance?

7
What Kind of Self-Assessment Do You Do?

• Does the Company Have an Ongoing Process for
  Auditing Compliance with Commission Regulations?

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How Do You Respond to Issues?

• How Has the Company Responded to Prior
  Wrongdoing?
• Did It Take Disciplinary Action Against Employees
  Involved in Violations?
• When Misconduct Occurs, Is It a Repeat of the
  Same Offense or Misconduct of a Different Nature?
• Does the Company Adopt and Ensure Enforcement of
  New and More Effective Internal Controls and
  Procedures to Prevent a Recurrence of Misconduct?
  

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Questions?