Compliance Perfection Isn’t Realistic. Amen.

spoke at the 2016 FINRA Annual Conference in Washington, DC, on May 23 focusing on the intersection of compliance and commerce. During his speech, he points out passionately that enforcement is just a part, not the whole, of an effective regulatory program. He said:

“While regulators strive to help the industry be perfect, we know that perfection isn’t realistic. And the regulatory structure is not a failure if some enforcement is required. Each day we should count it an equal triumph when an examination or our market surveillance program identifies issues and provides guidance that allows our firms to do the right thing by their clients without the need for an enforcement action.”

We agree wholeheartedly.

Guidance, doing the right thing, understanding the regulations and building solid compliance programs are triumphs not just for the regulated firms, but also for the industry and investors alike. Building strong cultures increases revenue and preserves hard won reputations.

Related Content

Latest Content

When Policies, Procedures and Testing Protocols Aren’t Enough…

The Compliance Program Rule continues to be a powerful tool for SEC enforcement, recently used by the SEC to address trading away in wrap accounts, misappropriation of retail client assets, and the misuse of an omnibus account. Advisory firms had written policies and procedures and testing protocols, but they were not good enough; are yours? … Continued

The Compliance Professionals Guide to Effective Trade Desk Monitoring

Global regulators continue to enhance their ability to monitor the activities of market participants through a combination of new rules, filing requirements, and upgrades to surveillance technologies. As a result, many market participants, including both buy-and sell-side firms, need to re-assess how they currently monitor the trading desk, and whether new policies and procedures are … Continued

How Do You Supervise for SEC Pay-to-Play Violations?

If you wanted more information about the contours of the SEC’s Pay-to-Play Rule, or how the SEC may enforce it, three recent Settlement Orders against large investment advisers for “over de minimis” political contributions provide some insight regarding one of the prohibitions: Contributions by Covered Associates to certain Government Officials over the specified Exception amount (capitalized words are terms in the … Continued

Do your Fund Documents Clearly Disclose Receipt of Accelerated Monitoring Fees?

Somewhat more reminiscent of the broken-windows enforcement era, two affiliated private equity advisers managing billions settled with the SEC on charges that they failed to make pre-commitment disclosures in fund governing documents related to accelerated fees received from portfolio companies. Interestingly, according to the Settlement Order, the advisers had made some disclosures in fund documents … Continued

With New Risk Alert, SEC Doubles Down on Best Execution

On July 11, 2018, the SEC issued a Risk Alert outlining commonly found compliance issues related to best execution by investment advisers. Advisers have an obligation to seek best execution of client transactions, taking into consideration quantitative factors such as execution quality and commission rate, as well as more qualitative factors such as the value … Continued

Mailing List

Subscribe to the Ascendant Compliance email list for the latest compliance resources, conferences, ComplianceCasts™, and more.

Loading form...

Contact Us

Ascendant works together with clients to identify and assess critical needs through customized plans. If you need assistance with compliance functions, regulatory services, cybersecurity or technology tools, we’d love to speak with you.