How to Structure a Section 165 Information Request Response

A Section 165 notice is not routine correspondence. It is a statutory information requirement, and how you respond shapes the supervisor's view of your firm's control environment as much as the content itself. A disorganised, over-caveated, or inconsistent response invites more questions. A precise, well-governed one closes the loop.

Read the notice precisely, then scope it properly

Section 165 requests are often broader than they first appear. Before anything else, have counsel and the accountable executive agree a written interpretation of each limb: what documents, what time period, what entities, what custodians, what definitions. If any term is genuinely ambiguous, raise it with the supervisor early and in writing. Unilateral narrowing is where firms get into trouble. Clarification in advance is both legitimate and welcomed.

Record the scoping decisions. If a future skilled person or enforcement team reviews the response, you want a contemporaneous rationale for what was in and out.

Establish a single response spine

Appoint one response owner, usually in Compliance or General Counsel's office, with authority to task across business lines. Set up:

• A central log of every document produced, with source, custodian, date range, and reviewer.
• A privilege log maintained in real time, not reconstructed at the end.
• A factual accuracy sign-off from the relevant business owner for every narrative answer.
• An SMF sign-off on the final submission, with the SMF's review documented.

The spine matters because Section 165 responses often become the factual record relied on in later supervisory engagement, enforcement, or litigation. Inconsistency between the response and later disclosures is the single most damaging outcome.

Handle privilege with discipline

Legal advice privilege and litigation privilege are preserved only where the relevant tests are genuinely met. Common failures include: internal investigation notes created without counsel involvement, email chains where legal advice is forwarded to wider commercial audiences, and board papers that mix legal advice with business analysis in a way that waives privilege over the whole document.

Practical discipline:

• Route sensitive workstreams through counsel from the first instruction, with a documented retainer scope.
• Mark genuinely privileged material clearly and consistently.
• Keep factual chronologies separate from legal analysis.
• Where a document is partly privileged, produce a properly redacted version with the privilege basis stated on the log.

Do not claim privilege over material that is not privileged. Regulators test privilege claims, and overclaiming damages credibility on everything else in the response.

Write answers that close rather than open questions

Supervisors ask follow-up questions when answers are incomplete, internally inconsistent, or raise implied issues the response does not address. Before submission, stress-test each answer:

• Does the narrative match the underlying documents produced?
• Are dates, names, and figures consistent across answers?
• If a control failed or a policy was not followed, is that stated plainly, with the remediation set out?
• Are caveats specific and justified, or vague and defensive?

Plain acknowledgement of issues, with evidence of action, generates less follow-up than careful wording designed to soften an uncomfortable fact. Supervisors read a lot of responses. They notice.

Preserve the record and prepare for the next step

Keep the full production set, privilege log, scoping memo, and sign-off trail together in a dedicated matter file. Brief the relevant SMFs on what was said, so there are no surprises at the next supervisory meeting. If the response identifies issues that merit a Principle 11 notification, make that notification separately and promptly rather than burying it in the Section 165 reply.

The decision point

Before submission, the accountable SMF should be able to answer one question: if the regulator asked us to walk through this response line by line tomorrow, would every answer still stand? If not, fix it now.

Frequently Asked Questions

Can we ask for an extension?

Yes, if the request is genuinely burdensome or the scope is broad. Ask early, in writing, with a specific revised date and the reason. Last-minute extension requests damage credibility.

Should external counsel always lead the response?

Not always. Routine requests can be handled in-house. External counsel adds value where privilege is likely to be contested, where the subject matter overlaps with potential enforcement, or where independence of the review will matter later.

What if we discover an error after submission?

Correct it promptly and in writing. Supervisors expect errors in good-faith productions. They do not forgive concealment.

Does Section 165 override privilege?

No. Legal professional privilege is preserved. But the claim must be properly made and properly documented, and it does not extend to underlying facts.

How detailed should the privilege log be?

Detailed enough for the regulator to understand the basis of each claim without seeing the document: date, author, recipients, general subject matter, and the specific privilege basis.