SETTING THE RIGHT COMPLIANCE CULTURE
| Pages | 155-159 |
| Date | 01 February 1994 |
| DOI | https://doi.org/10.1108/eb024803 |
| Published date | 01 February 1994 |
| Author | PETER MILROY MA FCA |
| Subject Matter | Accounting & finance |
SETTING THE RIGHT COMPLIANCE CULTURE
Received: 8th November, 1993
PETER MILROY MA FCA
PETER MILROY
IS
THE PRINCIPAL IN CHARGE OF THE
FINANCIAL REGULATION UNIT (FRU) AT
COOPERS & LYBRAND IN LONDON. HE HAS A
DEGREE IN LAW FROM CAMBRIDGE
UNIVERSITY AND QUALIFIED AS A CHARTERED
ACCOUNTANT WITH DELOITTE HASKINS &
SELLS.
THE FRU WAS SET UP IN 1987 AND IS A
DEDICATED UNIT WITHIN COOPERS &
LYBRAND WHICH PROVIDES ADVISORY
SERVICES ON REGULATION AND COMPLIANCE.
PETER MILROY HAS CARRIED OUT
COMPLIANCE ASSIGNMENTS FOR ALL TYPES OF
INVESTMENT BUSINESSES AND REGULATORY
BODIES, BOTH IN THE UK AND OVERSEAS.
ABSTRACT
The paper
examines
the
basic approaches
to compliance
in
UK investment businesses
and how
they affect
the
role
of the
compli-
ance
officer.
Many
organisations
seek to
impose
compliance disciplines
through a
strong, central compliance department.
This approach may
have
been successful
in
the
past.
However,
in the long
run,
a firm
will not be able
to
follow the
regulations
effectively
and
efficiently
until
compliance
becomes part of
its
culture.
Many
organisa-
tions have not yet
recognised
the need to
change
their approach.
INTRODUCTION
Many well-known companies have
been disciplined by the Securities
and Investments Board (SIB) and the
Self-Regulating Organisations (SROs)
during the last year. The Life Assur-
ance and Unit Trust Regulatory
Organisation (Lautro) and the Secu-
rities and Futures Authority (SFA)
have imposed substantial fines on
their members1 and the Investment
Management Regulatory Organisa-
tion (IMRO) has recently taken
powers to increase to £1m the maxi-
mum fine which its Disciplinary
Committee can impose.2 It is gener-
ally accepted that the true cost of
disciplinary action is much higher,
taking account of investigation and
rectification costs which can run into
millions of pounds, while for many
firms the real price of disciplinary
action is the damage to their reputa-
tion.
Although it may be unfair, the
performance of compliance officers
is often judged by their success in
keeping the company's name off the
list of offenders, and they can suc-
ceed only where the company has
the right compliance culture.
155
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