The role of compliance

Abstract

Purpose

To discuss the scope and limits of the compliance department's responsibilities in securities firms.

Design/methodology/approach

Describes the background to establishing stand‐alone compliance departments; the organizational structure of compliance departments; typical compliance functions; how the compliance department coordinates with business units, senior management, internal audit, and risk management; the distinction between a firm's responsibility to comply with applicable laws and regulations and the role of the compliance department; the distinctions between responsibilities of the compliance department and those of supervisors and senior management; and emerging regulatory trends impacting the compliance department.

Findings

New business activities and new regulations have placed increased demands on, and scrutiny of, compliance activities over the past few years. Regulators are looking to compliance departments to play an increasingly important role in identifying proactively and responding to potential wrongdoing.

Originality/value

Explains the critical importance of a well staffed, experienced, and adequately funded compliance department.

Citation

Industry Association, S., Compliance and Division, L. (2005), "The role of compliance", Journal of Investment Compliance, Vol. 6 No. 3, pp. 4-22. https://doi.org/10.1108/15285810510700863