The SEC's Compliance Program Rule requires policies and procedures to be designed to:

Prepare for the Canon Financial Institute CFIRS Exam with flashcards and multiple choice questions. Each question comes with hints and explanations for better understanding. Get ready to excel in your exam!

The requirement for policies and procedures under the SEC's Compliance Program Rule to be designed to prevent violations from occurring is crucial because the primary objective of compliance programs is to foster a culture of integrity and ethical behavior within firms. By establishing proactive measures, firms can minimize the risk of non-compliance and ensure that their operations align with regulatory expectations.

Preventive measures might include implementing thorough training programs for employees, conducting regular risk assessments, and maintaining clear guidelines on ethical practices. When policies are tailored to effectively prevent violations, they contribute significantly to creating a stable regulatory environment. This proactive approach not only protects the firm and its clients but also enhances the firm's reputation within the industry.

While detecting and correcting violations, as mentioned in the other options, are also important aspects of a compliance program, they become relevant only after a violation has occurred. Therefore, the emphasis on prevention underscores the overarching goal of compliance: to create robust systems that avert issues before they arise. This foundation is what ultimately supports a sustainable and compliant business operation.

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