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Does Your Firm Have Regulatory Compliance Staffing Needs?

Posted by Jeff Pelliccio on Apr 3, 2017 9:00:00 AM

In ICS insights

If your firm is registered with the Securities and Exchange Commission (SEC), you need trained personnel who can help keep your organization out of the SEC's cross hairs, and out of the news. Whether you are a registered investment adviser, a broker-dealer, hedge fund or manage registered investment companies, you are subject to an array of sometimes confusing rules and regulations. Having the right compliance personnel supporting your firm, and having enough of them, is critical. Staffing agencies with a focus on legal and compliance staffing can be an invaluable resource. 

In its 2017 Exam Priorities memo, released in February, the SEC Office of Compliance Inspections and Examinations (OCIE) announced its focus areas for 2017 examinations of regulated entities. While there likely was not anything surprising on the list for most firms, the annual memo can serve as a good litmus test firms as they evaluate compliance staffing and resource budgets. 

How the SEC's Focus Areas Might Impact Compliance Staffing

As in years past, the SEC intends to devote resources this year to examining firms that have never previously been examined. If this describes your firm, consider engaging some short-term compliance or audit personnel with experience in similar firms that have undergone audits. Bringing in someone with experience elsewhere, even for a short-term engagement, can help your company avoid a "bubble" effect when it comes to your compliance processes. 

Likewise, another focus area this year that should not surprise SEC-regulated entities is firms where either the firm, or its employees, have a track record of misconduct or previous violations. In such cases, it is critical for firms to be able to demonstrate their commitment to ensuring compliance moving forward. Firms that take a haphazard approach to staffing the compliance function with unseasoned workers, or with personnel who are wearing multiple hats and cannot devote enough time to compliance, may find themselves in hot water. Staffing agencies can help by sourcing, screening and placing candidates who understand compliance and have relevant industry experience. 

SEC-regulated entities should also ensure their compliance personnel have enough product knowledge and experience in order to effectively meet their regulatory obligations. OCIE intends to continue to examine ETFs, so-called "robo advisers," wrap-fee products and money market funds for compliance. If your company has new product offerings, or doesn't have qualified compliance department personnel, a staffing agency can be the solution to find workers with specific product knowledge.

Technology will be another focus area in 2017, and firms being inspected will need to demonstrate their commitment to cybersecurity and regulatory systems integrity. In addition to having regulatory systems that operate in a manner that is compliant with regulations, firms also need to have controls and a sound risk management infrastructure in place. Working with staffing agencies can help firms meet short-term or long-term needs for personnel who are versed in both technology and compliance.

Other initiatives for OCIE this year will include regulated entities' AML efforts, a focus on senior investors and how firms protect them, and municipal advisors, transfer agents and private fund advisers. 

Is Your Compliance Department Understaffed? ICS Can Help!

SEC-regulated firms should review their compliance staffing with a critical eye, in light of OCIE's memo. Understaffing the regulatory compliance function can do more than lead to exam deficiencies; it can leave your firm unable to adequately prevent, detect and correct rule violations. This, in turn, could leave your firm's clients vulnerable to potential harm. No company ever wants to be in the news for compliance violations. While a fully-staffed compliance department will not completely eliminate the possibility of rule violations, it can significantly lower the risk. 

At ICS, one of our key focus areas is helping organizations fill legal and compliance roles with qualified, skilled candidates who understand the regulatory landscape and how to keep your firm out of the regulators' cross hairs. Few staffing agencies offer the resources ICS can provide to help you meet your compliance staffing needs. Whether you need help for short-term projects or need to fill longer-term roles, you can count on ICS. 

With offices in New York city, Washington D.C., Chicago, Fort Lauderdale, Dallas, Houston, Minneapolis and Denver, we are able to help firms across the country meet their staffing needs. Contact ICS today to learn more.