Schapiro Calls for Compliance Officers to Lead “New Era of Responsibility”
In a recent speech to BD compliance professionals, SEC Chairman Mary Schapiro challenged compliance officers to lead a “New Era of Responsibility” on Wall Street. She opined that compliance officers have the “first-line obligation” to ensure that firms and their employees are meeting their obligations to investors. She defined the “New Era of Responsibility” to include firm-wide supervisory controls including stress testing, scenario analysis, custody, and asset verification; protection of customer data; controls over delivery of non-traditional investment products; and enterprise-wide supervisory controls. She also exclaimed that “the Enforcement Division has been uncuffed.”
OUR TAKE: We interpret Ms. Schapiro’s remarks as suggesting a move toward centralizing the compliance and risk management functions rather than assisting/informing/testing line management’s compliance responsibilities. It also raises the question about who has ultimate accountability for compliance failures. Finally, Ms. Schapiro seems to be changing the mission from ensuring compliance with the securities laws to protecting investors.