WHAT IS A 'Compliance Officer'

Compliance officer refers to an individual who ensures a company complies with its outside regulatory requirements and internal policies.

BREAKING DOWN 'Compliance Officer'

A compliance officer is an employee of a company who helps that company maintain policies and and procedures to remain within an industry's regulatory framework. The duties of a compliance officer may include reviewing and setting standards for outside communications by requiring disclaimers in emails or examining facilities to ensure they are accessible and safe. Compliance officers may also design or update internal policies to mitigate the risk of the company breaking laws and regulations, and lead internal audits of procedures.

A compliance officer must have a thorough knowledge of the company and an awareness of where possible regulatory breaches may occur. It is essential that the compliance officer effectively communicate the company’s key ethics principles and compliance regulations. Compliance officers organize regular training sessions for employees to communicate key regulatory changes and updates. This is particularly important in a heightened regulatory environment where change is constant. The compliance officer must work with business units and management to ensure appropriate contingency plans are in place that set guidelines on how to respond to a possible compliance breach.

Skills of a Compliance Officer

A compliance officer requires a unique skill set to ensure a company’s operations fully comply with regulations and procedures. It is critical that a compliance officer possess high ethical standards and honesty as this individual is responsible for ensuring a company adheres to required regulations. Compliance officers continually review the work of others, therefore it is essential they have polished people skills and work well with colleagues. Compliance officers need to be reliable, showing commitment and unity in relation to a company’s regulations and procedures, and it is crucial they demonstrate this to colleagues, leading by example. Compliance officers must also have strong attention to detail. They need the ability to notice actions that may result in a liability.

In the event of a regulatory breach, it is important for the compliance officer to have appropriate disciplinary measures in place to avoid a future recurrence. It is the compliance officer’s duty to ensure continual monitoring and review of compliance procedures to help identify possible areas where improvements could be made. Compliance officers are expected to provide an objective view of company policies. Influence by other employees, including management and executives, to overlook infractions may result in significant fines or sanctions that may lead to financial loss or even business closure. Larger companies typically have a chief compliance officer (CCO) to direct compliance-related activities.

RELATED TERMS
  1. Compliance Department

    A compliance department ensures that a financial services business ...
  2. Series 14

    The Series 14 is an exam and certification for professionals ...
  3. Front Office

    The front office is the sales personnel and corporate finance ...
  4. Data Protection Officer (DPO)

    A data protection officer (DPO) is a position within a corporation ...
  5. Audit Department

    An audit department is a unit within a company that is responsible ...
  6. Chief Risk Officer (CRO)

    A chief risk officer is an executive who identifies and mitigates ...
Related Articles
  1. Personal Finance

    Common interview questions for compliance officers

    Prepare to ace your compliance officer interview. Learn how to answer some commonly asked interview questions and what you need to know to come out ahead.
  2. Tech

    Top Compliance Headaches for Financial Advisors

    Advisors who do not devote sufficient attention to compliance issues can find themselves in hot water with both regulators and their clients.
  3. Financial Advisor

    What Triggers an SEC Audit for Financial Advisors?

    Advisors looking to avoid an SEC audit should pay heed to this list of what may catch the regulator's attention.
  4. Financial Advisor

    Technology’s Role in DOL Fiduciary Rule Compliance

    Incorporating the right technology is a crucial, early step to comply with the new fiduciary rule.
  5. Financial Advisor

    Social Media and Compliance: Toeing the Line

    These are things advisors can do to stay in line with compliance guidelines while effectively leveraging social media.
  6. Financial Advisor

    Advisors: What to Know Before You Text

    Texting is becoming more popular between clients and financial professionals, but compliance can be tricky. Here's what to know before advisors text.
  7. Financial Advisor

    Retirement Plan Advisors: Here's What the SEC Expects

    Here's what the SEC looks for when advisors align clients' suitability with investments.
  8. Personal Finance

    A Look at Entry-Level Careers in Finance

    Learn more about the entry-level career options that are available after a student has obtained their finance degree and is ready to enter the workforce.
  9. Managing Wealth

    Top 3 Trends Affecting Private Wealth Management

    Don't miss out on high-net-worth clients because you aren't prepared for their service demands.
  10. Financial Advisor

    How to Create a New Financial Product in 10 Steps

    The 10 steps outlined here are essential to the creation of a new financial product.
RELATED FAQS
  1. How do business ethics differ among various countries?

    Find out why business ethics differ between countries, including laws relating to controversial topics that may differ from ... Read Answer >>
  2. What are the rules behind the delisting of a stock?

    Find out the criteria for a company to remain listed on a stock exchange. Learn what actions would lead to a security being ... Read Answer >>
  3. How are asset management firms regulated?

    Find out how the asset management industry is regulated and how those regulations fit within the broader scope of financial ... Read Answer >>
  4. What Agencies Oversee U.S. Financial Institutions?

    Discover the specific responsibilities of some of the major regulatory agencies that oversee financial institutions and markets ... Read Answer >>
Trading Center