A compliance competence partnership approach model
| Pages | 140-150 |
| Date | 01 April 2006 |
| DOI | https://doi.org/10.1108/13581980610659459 |
| Published date | 01 April 2006 |
| Author | Jonathan Edwards,Simon Wolfe |
| Subject Matter | Accounting & finance |
FEATURE ARTICLE
A compliance competence
partnership approach model
Jonathan Edwards
Institute of Business and Law, Bournemouth University,
Bournemouth, UK, and
Simon Wolfe
School of Management, University of Southampton, Southampton, UK
Abstract
Purpose – Compliance competence is key to the operation and reputation of the financial services
sector and is now completely embedded in the way financial services organisations carry on
investment business. It is also fundamental to the Financial Services Authority (FSA) in seeking to
achieve its regulatory objectives as set out in sections 3-6 of the Financial Services and Markets Act
2000. A great deal has been written on the topic of compliance and competence and the core objective
of this paper is to offer a compliance competence model for financial institutions that recognises and
highlights the importance of the regulator and the regulated working together as partners.
Design/methodology/approach – A unique compliance competence partnership approach model,
arising from case study research, is proposed and consists of three key elements: good compliance
practice, good ethical practice and a positive FSA relationship. The three elements are represented as a
tripod with three mainstays that are intrinsically linked. The mainstays are supported by
cross-members that consist of underlying and intrinsic issues of compliance competence.
Findings – The regulator and regulated need to work together in a proactive partnership.
Organisation need to formulate a clear ethical policy involving employees from every aspect.
Originality/value – The partnership approach model, advocated here, would create a real
partnership between the FSA and its regulated organisations.
Keywords Competences,Partnership, Modelling, Ethics, FinancialServices Act
Paper type Viewpoint
Introduction
It is perhaps now opportune to consider a model for compliance competence for
financial institutions, with the Financial Services Skills Council (2004) and the
International Compliance Association having embarked upon establishing new
standards for the compliance function. The aim of this paper is to offer a
straightforward and practical model for comp liance competence for financial
institutions, involved in investment business and subject to the conduct of business
rules within the Financial Services Authority’s (FSA) Handbook. Essentially the model
sets out to provide an analytical framework for identifying the underlying com pliance
competence factors and their linkages that are core to compliance competence.
Increasingly, organisations are coming under pressure to show not only to the
regulator but also to the consumer that the way they carry on their business is
compliance competent. To this end the paper commences with an explanation of
compliance competence. This is followed by the presentation of the compliance
The current issue and full text archive of this journal is available at
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JFRC
14,2
140
Journal of Financial Regulation and
Compliance
Vol. 14 No. 2, 2006
pp. 140-150
qEmerald Group Publishing Limited
1358-1988
DOI 10.1108/13581980610659459
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