Compliance Professionals

Why is there an increased focus on compliance in financial services?

Over the last two decades, compliance has become a fundamental component of financial services.

With a growing set of regulatory and operational compliance requirements, compliance managers are under increased pressure. Today compliance goes beyond regulation. Society demands rigorous standards of integrity in financial services and internal control. The compliance function is an integral part of the corporate governance structure, augmenting and strengthening other aspects of control and risk management.

Regulatory liabilities can be significant, so organisations look for ways to protect themselves as enforcement becomes more aggressive.

The ASIC Act directs ASIC to ‘take whatever action it can take, and is necessary, in order to enforce and give effect to the laws of the Commonwealth that confer functions and powers on it’.

ASIC uses its enforcement powers to detect and deal with unlawful conduct, to recover money in appropriate circumstances and sometimes to prevent unlawful conduct before it happens. ASIC responds to breaches of laws within its regulatory responsibility, ranging from minor regulatory offences through to serious misconduct

An examination of enforceable undertakings illustrates ASIC’s focus on the need for a culture of compliance.

In his Chairman’s message on Strategic Outlook for 2014 – 15, Mr Greg Medcraft promises that ASIC “will take enforcement action against entities regardless of their size or reputation”

What does the compliance department do?

Compliance personnel play a critical role in promoting a compliance culture in their organisation.

Compliance is responsible for overseeing the organisation’s activities to ensure that they are being conducted in accordance with regulatory requirements and with other voluntary codes to which the organisation subscribes.

Compliance provides guidance in relation to these regulations. Usually this includes development of policies, procedures, and guidelines designed to facilitate adherence to applicable laws and regulations. Compliance keeps all personnel informed on regulatory requirements and events. Compliance also performs a critical ongoing monitoring and surveillance of the business units and proactively reviews business activities for potential regulatory, compliance, and reputational risks.

Perhaps one of the most important aspects of Compliance is to develop and nurture the organisation’s relationship with the regulator. Organisations must interact with its regulators in an open and cooperative way. The relationship with the regulator can be greatly facilitated by clear evidence of a strong compliance culture.

Such a culture should not only facilitate regulatory relationships, but also enhance commercial relationships. Organisations associated with poor compliance, especially those who have been publicly censured by the regulator, may find this has a negative impact on its reputation.

“It takes twenty years to build a reputation and five minutes to destroy it.” (W. Buffet)

Compliance staff must be competent to undertake the activities for which they are responsible.

How does FEP support compliance professionals in financial services?

We provide a series of courses exclusively tailored to compliance in financial services. They are designed to support Compliance Managers and Responsible Managers. These courses are also suitable for senior managers and middle managers who are in the “first line of defence”.

The courses are presented by workshops and/or online. Courses currently being offered in the series include: