SEC Chairman Mary Jo White told an audience Tuesday from the National Society of Compliance Professionals that compliance officers “have a very tough job in a complex industry where the stakes for all concerned are extremely high.”
The SEC, she said, has tremendous respect for compliance officers and “will do everything we can to help empower you so you can do your jobs even more effectively.”
She emphasized the great reliance firms have on compliance departments and the role COs play in carrying out SEC rules, noting that compliance officers not only protect investors but also the profitability and reputation of businesses. “As a result, the livelihoods of all those who work alongside you are safeguarded,” she said.
The SEC needs compliance professionals to make its work possible, White said. In examining nearly 11,000 registered investors who advise nearly 9,700 mutual funds and electronically-traded funds, and 30,000 private funds, the SEC relies on the effectiveness of in-house compliance officers at such firms to instill a culture of compliance throughout their businesses.
The SEC recently filed its first-ever charge against an individual for misleading and obstructing a compliance officer of an investment adviser, she said.
She described the role of auditors in providing an independent review of books and records and of senior executives in instilling an ethical culture in which staff is expected to do the right thing and escalate unresolved problems. Boards of directors must oversee all aspects of the program, including seeing all reports that are sent to upper management.
The SEC is using risk alerts to share the findings gleaned from recent examinations when certain trends emerge. COs can take note of how deficiencies at other firms got them into regulatory hot water and take the steps to fix the holes in their own policies or practices.
Julie DiMauro is the executive editor of FCPA Blog. She can be reached here.
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