How to get compliance sign-off before joining a referral program

Get approval first, then register

Ask before you register, not after a client shows interest. Send your compliance team a short written request that names the program, describes what you would do, explains how and when you could be paid, and attaches the published program terms. A dated written approval, with any conditions, is the record you want on file before the first introduction.

Keep the request short, because the activity is narrow. SourceX referral partners introduce US companies and pass on basic fit information. They never export, upload or describe confidential records, and they take no part in negotiating price or terms. Any reward comes out of SourceX's fee, not out of the client's proceeds.

What will compliance ask about a referral arrangement?

Expect five lines of questioning whatever kind of firm you work for. Bring a written answer to each.

Which rules is your firm actually checking?

The questions are similar everywhere; the rule behind them differs by firm type. Know which one governs you before the meeting.

One more point for anyone in securities: do not lean on an exemption. The SEC proposed a finder exemption in 2020 but did not finalize it, and it concerned helping companies raise capital, not introducing companies for data licensing. Leave exemptions out of the memo and let compliance classify the activity.

This is general information, not legal, tax or financial advice. Confirm with your own counsel, tax adviser or professional body before acting.

Before you start: what to gather

An hour of preparation saves a round of questions. Collect these first.

• Your firm's outside activity policy and the form it uses
• Your code of ethics or conflicts policy, including any section on third-party compensation
• The published program terms and the program FAQ
• A short list of clients you might introduce, with the services your firm provides each
• Your draft client disclosure sentence
• A note on how tax reporting of any reward would be handled, to confirm with your tax adviser

Step by step: from first email to written approval

1. Find the right form and the right approver. Ask which policy covers paid outside activities and who signs off. At a broker-dealer, ask for the outside business activity process; at a CPA firm, start with whoever owns independence and risk management.
2. Describe the activity in one paragraph. Name SourceX and say you would introduce US companies with 50+ full-time employees at peak (contractors excluded) that may license operational records. SourceX qualifies each company and runs the inventory, pricing, buyer review, contracting and delivery.
3. Quote the compensation exactly as published. Copy the reward formula and payout trigger from the terms. Do not estimate earnings, and say plainly that rewards are not guaranteed.
4. Map conflicts client by client. Flag any client for whom your firm performs attest work, acts as a fiduciary, advises on a sale or financing, or serves in a court-supervised role. For those, expect a prohibition or a disclose-and-consent condition.
5. Draw the confidentiality line. You share approximate headcount, years in operation, the kinds of systems in use and the sponsor's contact details, and only with the client's permission. Redaction and de-identification are settled between the company and SourceX before any work begins; you never touch records.
6. Propose your disclosure. Offer the sentence you will give clients in writing before any introduction, for example: "If your company licenses data through SourceX, SourceX may pay me a referral reward out of its own fee. It does not reduce what your company receives, and you are under no obligation to proceed."
7. Submit and ask for conditions in writing. Request a dated approval listing any conditions, such as excluded clients, pre-clearance of each introduction or annual re-attestation.
8. Calendar a re-review. Revisit the approval when your role changes, when you move firms, or when a rule changes, for example when FINRA announces the effective date of Rule 3290.

A one-page memo outline you can adapt

Replace the braces, attach the terms, and send it as a single page.

Common mistakes that slow approval

Illustrative example

Illustrative and fictional: Dana is a transaction-advisory director at a regional CPA firm. Two advisory clients have long operating histories: a freight brokerage with about 180 full-time staff and an IT services firm with about 90. Her firm also audits the brokerage.

Dana sends her risk management partner the memo outline above with both names flagged. The firm approves the arrangement with three conditions: no introductions of attest clients, written disclosure to each client before an introduction, and re-attestation every year. Dana introduces only the IT services firm, after giving its CEO the disclosure sentence in writing, and files the approval with her partner records.

Next step

Once you hold written approval, register as a partner and keep a copy of the approval with your records. If compliance asks how the formula behaves, the referral earnings calculator shows it using the published program.

Some roles bring extra questions. Restructuring professionals working in court-supervised matters should read what creditors' committees ask before an estate licenses records. Operating partners can expect an investment committee to ask about reputational risk when portfolio companies license data. If your real question is the ethics rather than the paperwork, read the ethics of taking a referral fee on a client's data deal first, and the FAQ covers the rest.