The Role of Compliance
Under the overall direction of the Executive Committee of the Securities Industry Association (SIA’s)* Compliance and Legal Division, this White Paper was developed by a working group comprised of members of the Division’s Executive Committee, a member of the SIA’s Self-Regulation and Supervisory Practices Committee and Gerald Baker, a consultant to the Division, in multiple meetings and discussions that took place during the first five months of this year. In addition to the significant time and effort supplied by our Division and its membership, we wish to acknowledge the valuable assistance provided by Wachtell, Lipton, Rosen &; Katz, outside counsel for this matter.
*SIFMA is the product of a merger between the Securities Industry Association (SIA) and The Bond Market Association (TBMA) in 2006.
See also: The Evolving Role of Compliance (March 2013)
Excerpt
Securities firms have long made it a priority to adopt and implement robust compliance programs as part of their self-regulatory efforts and good business practices. The Compliance Department plays an important role in securities firms’ compliance programs, primarily one of advice, monitoring and training in support of business units and management. The purpose of this paper is to discuss the scope and limits of responsibilities of Compliance Departments in securities firms, and to clarify the distinction between (a) a firm’s general efforts designed to achieve compliance with applicable laws, rules and regulations, and the specific functions of the Compliance Department in support of those goals, and (b) management’s responsibility to supervise, and the Compliance Department’s role to monitor and surveil. This paper will also discuss recent regulatory initiatives impacting compliance programs and, particularly, the role of the Compliance Department.