ROLE OF COMPLIANCE PROFESSIONAL
Firms should emphasize the high value of their reputation and interest in contributing to enhanced investor protection and the integrity of the securities industry. Therefore, they should be committed to high standards of conduct and to support the positive and unique role served by those at the firm whose responsibilities are related to compliance or legal functions. Accordingly, they should:
- Insist on compliance and high ethical standards throughout the firm with senior management leading by example.
- Emphasize that compliance with securities industry laws, rules and ethical standards is expected of every employee, and that line managers are responsible for effectively supervising employees under their direction to insure adherence.
- Consider the compliance record of individuals, branch offices and other organizational entities under the control or supervision of managers and supervisors in their personal performance evaluations.
- Provide appropriate vehicles and resources for the transmission of compliance and regulatory information to employees throughout their organizations and sufficiently emphasize compliance and regulatory subjects in employee training.
- Make available to all employees an effective means of communicating (including confidential or anonymous communications, if appropriate) compliance, regulatory or ethical concerns to compliance professionals and/or senior management without fear of retaliation.
- Support and provide adequate resources to compliance professionals.
- Maintain a reporting relationship and/or unrestricted access to senior management for compliance professionals.
- Encourage the development, professionalism and retention of the firms' compliance professionals with compensation, benefits and recognition in keeping with their contributions.
- While preserving ultimate decision-making responsibility of line managers, involve compliance professionals and recognize their input as an integral component of decisions relating to hiring and terminating employees.
- Actively involve their compliance professionals, along with line managers and supervisors, in the firm's internal disciplinary process to insure fair, consistent and appropriate action in instances of violations of industry laws, regulations or ethical standards.
- Require compliance professionals to review disclosure language in all regulatory filings on registered representatives to promote the integrity of the regulatory reporting system while preserving fairness for the individual.
- Insure sufficient access to information for compliance professionals to enable them to carry out their responsibilities.
- Share knowledge of techniques that one firm has found effective in improving compliance and supervision with other firms for the common good of the industry.
For more information on Best Practices, please contact Don Kittell.
(Adopted by the Board on November 10, 1995.)
