Compliance Department

AAA

DEFINITION of 'Compliance Department'

The department or unit within a brokerage firm, bank or financial institution that ensures compliance with all applicable laws, rules and regulations. The compliance department generally has a wide range of roles and responsibilities within a firm. Depending on the business of the financial institution, these duties may range from monitoring trading activity, preventing conflicts of interest and ensuring compliance with regulations at brokerage firms, to preventing money laundering and potential tax evasion at large banks.

INVESTOPEDIA EXPLAINS 'Compliance Department'

As a firm's internal police force, the compliance department is unlikely to be the most popular unit in a firm. However, a competent compliance department is of the utmost importance in maintaining a firm's integrity and reputation.


Compliance demands for most financial firms increased regulatory oversight significantly in the wake of the 2008 credit crisis. This has led to increased demand for experienced compliance staff.

Although compliance costs have spiraled higher in recent years, the costs of non-compliance - even if inadvertent - can be far greater for a financial institution. Non-compliance may lead to stiff monetary fines, legal and regulatory sanctions, and loss of reputation.

RELATED TERMS
  1. Dealer

    A person or firm in the business of buying and selling securities ...
  2. Respondeat Superior

    A legal concept in which a company and the company's management ...
  3. Series 14

    An exam administered by the Financial Industry Regulatory Authority ...
  4. Agent

    1. An individual or firm that places securities transactions ...
  5. Full-Service Broker

    A broker that provides a large variety of services to its clients, ...
  6. Market Maker

    A broker-dealer firm that accepts the risk of holding a certain ...
Related Articles
  1. Insurance

    Trending Toward Asset-Based Management

    Will charging fees instead of commission increase your client base?
  2. Professionals

    Get A Job In Compliance

    If you're a stickler for rules, this could be a promising career path for you.
  3. Professionals

    On The Record: Communications With The Public

    NASD Rule 2211 can make or break your career as a registered principal.
  4. Professionals

    Keeping Up With Your Continuing Education

    Professional maintenance can be a chore. Learn how to streamline the process.
  5. Options & Futures

    6 Steps To Successfully Switching Financial Careers

    Save time and money by following these tips to a smooth career transition.
  6. Brokers

    Is Your Broker Ripping You Off?

    We show you how to resolve a problem without getting the lawyers involved.
  7. Options & Futures

    Tips For Resolving Disputes With Your Financial Advisor

    Before you blame your advisor for your losses, be sure you know your rights and responsibilities.
  8. Options & Futures

    Get Hired In Finance, Despite The Recession

    During a recession, there are still plenty of options for a business school graduate.
  9. You may owe money, but you still have rights. There's a long list of things debt collectors are banned from doing to you. Know what's illegal.
    Credit & Loans

    5 Things Debt Collectors Can't Do To You

    You may owe money, but you still have rights. There's a long list of things debt collectors are banned from doing to you. Know what's illegal.
  10. Sounds like a bad horror movie, but it really could happen to you. Here's how to identify zombie debt and send collectors back to the dead-debt graveyard.
    Credit & Loans

    How To Beat Off A Zombie Debt Collector

    Sounds like a bad horror movie, but it really could happen to you. Here's how to identify zombie debt and send collectors back to the dead-debt graveyard.

You May Also Like

Hot Definitions
  1. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  2. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  3. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  4. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  5. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  6. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
Trading Center