WHAT IS COMPLIANCE?
| Published date | 01 April 1994 |
| DOI | https://doi.org/10.1108/eb024816 |
| Pages | 278-285 |
| Date | 01 April 1994 |
| Author | GARETH ADAMS |
| Subject Matter | Accounting & finance |
WHAT IS COMPLIANCE?
Received (in revised form): 7th
June,
1994
GARETH ADAMS
GARETH ADAMS
IS
GROUP COMPLIANCE COORDINATOR FOR
HSBC
HOLDINGS PLC.
THE VIEWS EXPRESSED IN THIS PAPER ARE
THOSE
OF THE AUTHOR AND DO NOT
NECESSARILY REPRESENT THE VIEWS OF THE
HSBC
GROUP.
ABSTRACT
This paper examines
the nature of compli-
ance,
and
its role
within
the
modern finan-
cial services organisation. Defining
compliance
as the
management
of
regula-
tory
risk,
the paper
analyses
what those
risks
are,
and
outlines
the
process by
which
firms should
seek
to manage that
risk.
It
concludes by
outlining the
possible benefits
of
such
an
approach.
INTRODUCTION
It may seem somewhat late in the
day to be asking the question 'What
is compliance?', yet the practice of
compliance as understood in the UK
in the 1990s is a relatively modern
development (it can be dated to the
latter part of 1987 when companies
began the application process lead-
ing to authorisation under the
Financial Services Act 1986) whose
evolution has been much discussed,
and whose emergence has generated
strong opinion.
Compliance as a concept has
been around in some manner for a
long time. The first 'Act to restrain
the number and ill-practice of
Brokers and Stock-jobbers' was put
on the statute books in the UK in
1697.
That Act lapsed in 1704. But in
its modern incarnation compliance
has become something altogether
more complex and sophisticated,
and more in the nature of an in-
dustry or profession.
The proliferation of regulators
and rules, not only in the UK, but
around the world has been a feature
of the last ten years, and will con-
tinue to be so. While the upheavals
currently being experienced in the
regulatory structure itself in the UK
are not mirrored elsewhere, the
introduction of new laws and rules
continues apace. The adoption of
various regulatory European Union
Directives over the coming years will
contribute to the climate of change.
In addition, the lowering of trade
barriers within Europe, and a grow-
ing internationalisation of business
has further complicated the picture.
278
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