The Role of the Compliance Officer

Services to the Business
1. Enabler to business
  1. Consultant
    1. for strategic/operational developments
    2. representation at key meetings/projects
    3. work with business to formulate best practice procedures
      1. meet needs of customers /business /regulator
    4. ad hoc advice on regulatory matters & day to day issues
    5. compliance not responsible for decisions made just outline risk/issues
  2. Monitor
    1. oversee that activities comply with regulation/legislation
    2. monitoring programme
      1. assurance to business
    3. useful MI for business
      1. influence decision making
    4. identify process/controls weaknesses
      1. insufficient/gold plated
    5. risk based/themed like FCA approach
      1. concentrate resources on key areas of concern
      2. Event driven
        LIBOR
      3. issues & products
        claims
        conflicts
  3. Communicator
    1. internal issues
    2. external events
      1. changes to rules
        consumer credit
        so compliance must keep up to date with regs
        help with process/policy changes
      2. industry events
    3. Regular briefings to snr mgmt
    4. compliance should have internal communication processes in place
      1. risk report
      2. event escalation
    5. development of relationships with business
      1. improve culture
    6. communicate with Regulator
      1. Principle 11
  4. Educator
    1. Training to business
      1. so less reliance on compliance day to day
    2. support / oversight of other trainers to the business
2. Facilitator
  1. Compliance culture / ethical behaviour
    1. lead by example
    2. Provide high quality service
    3. demonstrate value
      1. help firm achieve its ends
      2. Feared is no value
    4. TCF - 1 - central to corporate culture
      1. Clive Adamson speech
3. Regulatory Compliance
  1. SYSC - need systems & controls for compliance
    1. high level rqmts
      1. staff competent, appropriate knowledge
      2. resources adequate
      3. responsibilities & reporting lines clear
      4. arrangements appropriate & effective
      5. appropriate to firm- scale nature & complexity
      6. independent of day to day activities
      7. appropriate access to firm records
    2. 2004 Fine Carr Shepards Crosthwaite
      1. manual
      2. monitoring
      3. roles, responsibilities, reporting lines
  2. CF10 - compliance oversight - designated investment business
FCA view
1. Snr Mgrs responsible for compliance
  1. SYSC
  2. FCA Principles of good regulation
    1. Snr mgmt responsibility
Role
1. manage/mitigate compliance risk
2. may be outsourced but can't outsource responsibility
Key Roles in Function
1. Operational Team
  1. conduct of business
  2. ad hoc queries
  3. help develop/implement policies
  4. sign off fin proms
  5. communicating changes in regs
2. Monitoring Team
  1. desk based reviews
  2. visits
3. AML Team
  1. FCA strategic objective - integrity
  2. AML 2007 rules dont apply to intermediaries but still FCA rqmts
  3. SYSC requires sys & curls to counter risk of firm being used for fin crime
  4. referrals to NCA
  5. MLRO
    1. where reg requirement must be CF11 - Money Laundering Reporting
4. Policy Development Team
  1. identify/review/ interpret changes
  2. respond to consultation papers
    1. CP13/10 - Detailed proposals for the FCA regime for consumer credit (CP13/10)
  3. consult with business on proposed changes
  4. lead in managing relationship with regulator
5. Business Review Team
  1. large firms - focus on quality of work
  2. sampling work
6. Training & Competence Team
  1. maintain records
7. Complaints & investigations
8. Project Teams
  1. established for particular tasks
    1. assess impact of consumer credit
Key Internal Relationships
1. Business Depts
  1. sales
  2. marketing
  3. Finance
    1. CASS
    2. RMAR
2. Internal Audit
  1. they help fulfil SYSC rqmts
  2. compliance may trigger their work or vice versa
3. Legal
  1. keep up to date with statutory instruments
  2. relationships with other parties
  3. Legal risk
4. Risk
  1. firm risk appetite
  2. Risk mgmt is in SYSC 7
Key External Relationships
1. The Regulator
  1. Principle 11
    1. keep supervisor updated
      1. less likely to be intensively supervised
  2. C1/C2 - more contact than others
  3. Compliance Officer key relationship
  4. good relationship helps when things go wrong
    1. Abbey National 2005
    2. early settlement discount
      1. public interest
        compensation sooner
        reduced costs for firm & regulator
        Principles of good regulation
      2. 30%
        Homserve
        JP Morgan Chase bank would've been £196,586,000.
Compliance, culture & Ethics
1. Culture important for long term success
  1. TCF 1 Compliance culture embedded
    1. consumer protection is operational objective FCA
  2. save mgmt time investigating/correcting errors
  3. Products to market quicker - right first time
  4. compliant reputation = business advantage
    1. firms do due diligence before entering contracts with other firms
      1. when clients are financial institutions - will know what is req'd
    2. FCA public censures
      1. FCA now announcing investigations
  5. Must be outcomes based & complemented by ethical culture
    1. Clive Adamson speech
    2. follow the spirit of the regulations
Qualities of Compliance Professionals
1. outcomes based is subjective so need good judgement
  1. Pre N2 rules based so needed good memory
  2. spirit of the regulations
2. Influencing
  1. facilitate & support not dictate
3. Business Acumen
  1. Principles based - no clear answer
  2. understand industry
  3. compliance is there to help the business perform
4. Knowledge
  1. rules
  2. understand spirit of principles
  3. up to date with regulatory initiatives
    1. UK, Europe, World
      1. FINMA
      2. S. Africa
5. Interpersonal skills
  1. Communication
    1. build trust & positive relationships
6. Listening
  1. find out what issues are
  2. understand what business needs from you
  3. speak to stakeholders
7. Decision making
  1. tough decisions
    1. proportionate & pragmatic

Next up

The Role of the Compliance Officer

Description

Resource summary

Similar

	Created by her5000 about 11 years ago