The Chief Compliance Officer (CCO)
The Chief Compliance Officer, one of the most important members of the management team, is primarily responsible for overseeing compliance within an organization, and ensuring compliance with laws, regulatory requirements, policies and procedures.
As the compliance leader and subject matter expert, the CCO is responsible for establishing standards and implementing procedures to ensure that the compliance programs throughout the organization are effective and efficient in identifying, preventing, detecting and correcting noncompliance with applicable laws and regulations.
The CCO has to provide reasonable assurance to senior management and the Board that there are effective and efficient policies and procedures in place, well understood and respected by all employees, and that the company is complying with all regulatory requirements.
The CCO must report directly to the Chief Executive Officer. He must also inform the Board about important issues and material violations.
These are some of the Chief Compliance Officer's responsibilities:
- Defining the necessary level of knowledge on existing and emerging regulatory compliance requirements across the organization.
- Developing the annual compliance work plan that reflects the organization's unique characteristics.
- Periodically revising the compliance plan in light of changes.
- Guiding in a productive, professional way, the compliance teams.
- Overseeing and monitoring the implementation of the compliance program.
- Providing guidance, advice, and/or training and educational programs, to improve business' understanding of related laws and regulatory requirements.
- Providing strategic direction to the management team on compliance.
- Preparing and presenting clear and concise compliance reports to the Board.
- Interacting with regulators on compliance issues.
- Coordinating efforts related to audits, reviews, and examinations.
- Developing policies and programs that encourage managers and employees to report suspected fraud and other improprieties, without fear of retaliation.
- Coordinating internal compliance review and monitoring activities, including periodic reviews of departments.
- Independently investigating and acting on matters related to compliance.
- Monitoring external review processes.
Challenges for the Chief Compliance Officer (CCO)
These are some major challenges for the CCO:
Challenge 1: The role is not clearly or properly defined.
Challenge 2: There are conflicts of interest.
Challenge 3: The CCO is not independent.
Challenge 4: The CCO does not report directly to the Board.
Challenge 5: The CCO's job is not decided and terminated only from the Board.
Challenge 6: The CCO does not have the financial and human resources necessary to do the job.
Challenge 7: There are no effective monitoring and reporting policies and procedures in place, and the CCO can do nothing about that.
Case Study - Chief Compliance Officer (CCO) job
We are looking for a Chief Compliance Officer responsible for ensuring compliance with SEC regulations, identifying and documenting regulatory risks and assisting the businesses in developing controls.
This position involves planning, organization and execution of day-to-day operational compliance activities. Additionally, this individual will help maintain a strong compliance framework for a growing team. The CCO will work with the business to remediate issues identified through testing and support.
The candidate should have experience providing direction and oversight and be able to help guide the team in the assessment of control deficiencies while assisting in developing effective remediation plans. The CCO will also provide direction in the ongoing maintenance of the annual compliance risk assessment.
The individual must be able to provide compliance guidance that balances regulatory requirements, risk mitigation and business objectives.
- Facilitating annual regulatory risk assessment, and providing senior management with recommendations based on the results.
- Tracking and providing recommendations for remediation of identified exceptions or deficiencies, and collaborating with the business to follow up on timely remediation.
- Reviewing best execution.
- Monitoring employee activity.
- Monitoring electronic correspondence.
- Ongoing employee training and new hire compliance training.
- Oversight of annual compliance testing.
- Monitoring complaints and reporting as needed.
- Performing daily, weekly, monthly and quarterly compliance reviews.
- Assisting advisors with questions related to their SEC and form ADV filings.
- Providing guidance to Operational groups related to client fee billing process and processing of investment advisory agreements.
- Working for the Code of Ethics and compliance manual updates.
- Working for regulatory inquiries.
The above statements are intended to describe the general nature and level of work being performed. They are not intended to be construed as an exhaustive list of all responsibilities, duties and skills required of the position.
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