Why comply?

Date01 March 2001
Published date01 March 2001
DOIhttps://doi.org/10.1108/eb025075
Pages211-217
AuthorDavid Jackman
Subject MatterAccounting & finance
Journal of Financial Regulation and Compliance Volume 9 Number 3
Why comply?
David Jackman
Received: 22nd May, 2001
Head of Industry Training and Business Ethics Advisor, Financial Services Authority, 25 North
Colonnade, Canary Wharf, London E14 5HS; tel: +44 (0)20 7676 1000; fax: +44 (0)20 7676 1099;
e-mail: david.jackman@fsa.gov.uk
David Jackman is Head of Industry Train-
ing and Business Ethics at the Financial
Services Authority. As such, he is respon-
sible for ensuring standards of compe-
tence across the UK's financial services
industry and has, among other achieve-
ments, set entry and continuing compe-
tence standards and requirements, and
established a new examination structure
for the financial services industry. He is
the author of a number of publications and
consultation papers as well as numerous
articles for newspapers and magazines.
THE KNOCK
Financial firms may know only too well
what it is like when a supervision visit is
due the next day. The compliance officer
has spent the last few weeks checking files,
collating what is hoped to be relevant
information, briefing colleagues, trying to
ensure everything is covered. Of course,
the officer is keen to convey the impression
that no special effort has been made. The
team, however, do not look very closely at
the dealing records that have been so meti-
culously checked. Instead, infuriatingly,
they pursue some details which the compli-
ance officer did not really see as being key.
What is the result? How does the firm
react? What is the end result for consumers
and the market? Is this the 'regulation
game', or can something more meaningful
be seen?
Can fear be the most sensible driver for
compliance? It is a truism that regulation
makes good business sense, not only for an
individual firm but for the industry as a
whole. It behoves both regulator and regu-
lated to do their best to make the system
work.
BEYOND COMPLIANCE
The question ought to be 'Why just
comply?'. If compliance is a matter of get-
ting by, keeping the regulator off the
firm's back, or keeping the regulator
happy, then compliance is in a pretty
fragile state. The culture of seeing regula-
tion as an irritating add on, an unnecessary
cost, a diversion from the serious business
of making money feeds the use of stick
rather than carrot.
Regulators must bear some responsibil-
ity for discouraging a minimum standards,
tick box approach. But, nevertheless, the
motivation should be that going beyond
the minimum makes sense in terms of
quality of business, customer retention,
staff retention and ultimately bottom-line
success. It is about taking a broader view
and longer-term view and these could be
difficult things to hold on to when the
market is going in the wrong direction.
The focus on the visit, the last minute rush-
ing around, cannot and should not be the
driver for doing 'the right thing' within a
firm relationships with the regulator
Journal of Financial Regulation
and Compliance, Vol. 9, No. 3,
2001,
pp. 211-217
© Henry Stewart Publications,
1358-1983
Page 211

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