CL6 Warning Letters Pose Challenges for Large Companies
I have now seen multiple letters from the NYSID warning companies that their CL6 privileges may be suspended due to problems with their companies' previous CL6 filings.
In these cases, the letters were addressed to, and were based on filings from, a single unit of the company and one that was other than the unit bringing the letter to my attention. However, the Department's warning applies to a company's filings across the board. In some cases, the unit bringing the letter to me did not realize that a temporary hold had been placed on their submissions until it had been lifted!
Of course, the NYSID doesn't know which unit generates which filings, so they are not in a position to clearly differentiate, but when companies have separate and distinct areas that generate filings and when those units may have very different policies and procedures in effect, these company-wide actions cause particular problems for large, decentralized companies.
The Department has indicated that they intend to expand the use of these warnings. (See earlier post on this topic.) As they do, large and dispersed companies will need to be sure that there is a communication mechanism in place so that each impacted unit receives notification that a temporary hold has been imposed. Units within larger companies with several filing units will also now have a strong vested interest in making sure that all units implement procedures for clean filings, rather than having to worry only about their own. No longer will a single unit within a company be able to be comfortable in their own careful submissions becuase their future abiltiy to use the CL6 approval process is linked with every other unit in the company. Policy form filing units must now become their corporate brother's keeper!