Helpful Tips for New Chief Compliance Officers

 

A Different Perspective

On November 30, 2015, SEC Commissioner Luis Aguilar published “Commissioner Aguilar’s (Hopefully) Helpful Tips for New SEC Commissioners." What follows is an application of a portion of Commissioner Aguilar’s advice geared for a new Chief Compliance Officer (“CCO”).

Commissioner Aguilar points out there is no handbook or “how-to” guide for being a Commissioner and the same is true for a CCO. While there are a number of books and reference materials on compliance regulations, for the most part, learning how to be a CCO comes from “on-the-job” training. A new CCO generally has to figure out many things on his/her own, but the learning curve can shorten by following some of Commissioner Aguilar’s advice.

Overarching Principles

Commissioner Aguilar referred to the oath each Commissioner recites upon being sworn to office as well as the mission statement of the SEC. Although CCOs do not have to take an oath, it is important to recognize the duty to protect that is inherent in the CCO title. For example, a CCO to an investment advisory firm has a fiduciary duty, along with the firm to protect firm clients. This is the spirit of regulation and keeping the protection mandate at the forefront will help guide a CCO’s actions and decisions.

Counsel and Collaboration

Commissioner Aguilar highlights the importance of having good counsel. If the CCO is fortunate to have compliance staff, the quality of staff members has a great bearing on the performance of the CCO.

Commissioner Aguilar also speaks of “creating a work environment where you and your counsels can take every opportunity to share views and ideas.” It is very beneficial for a CCO to collaborate and build relationships with others in the firm. The investment in these relationships will pay dividends during a CCO’s tenure.

Resources for Professional Development

A new CCO that has the benefit of training with their predecessor has a tremendous advantage over one who does not. Some new CCOs may have a head start because they are already experienced and highly qualified. Others may have had the job thrust upon them while having little knowledge of compliance.

There are numerous resources for new CCOs to consider that will assist them with their professional development. These include but are not limited to:

  • Subscribing to financial publications and receiving email alerts from regulatory websites;
  • Joining industry associations and networking groups;
  • Utilizing the services of a compliance consulting firm and/or securities law firm; and
  • Completing compliance certification programs.

New CCOs should assess their needs and discuss with senior management an appropriate plan for both initial and ongoing professional development.

CCLS can help. Since most of our consultants have served in the role of CCO, we are well versed in what it takes, which is why one of our “core” service offerings is mentoring and training CCOs and compliance personnel. To find out more, please contact us at info@corecls.com or call (619) 278-0020.