Schapiro Says that SEC Seeks to Leverage Compliance Professionals to Protect Investors
SEC Chairman Mary Schapiro, in her opening remarks at the national CCOutreach seminar, described a broad role for the CCO. She called compliance professionals the “first lines of defense against impropriety” with an “obligation to provide investors with an added measure of security above and beyond that which a regulator provides.” She also indicated that the SEC seeks to leverage third parties such as compliance professionals to assist the SEC’s mission to protect investors. She said that it is the job of the compliance officer to ensure that firms comply with the law, alert firms about conflicts of interest, and ensure appropriate disclosure. She also stressed that compliance professionals understand a firm’s business, investment strategies, employee responsibilities, business partners, counterparty risk, and money movements.
OUR TAKE: The concept that compliance professionals have some sort of duty to investors goes far beyond the text of Rule 206(4)-7 and Rule 38a-1. Also, the idea that compliance professionals are essentially an agent of the SEC to help in it is mission puts the compliance professional in a policing role for his/her employer. Also, Ms. Schapiro’s statements about the expansive review of a firm’s business operations suggests an expanded enterprise risk management role for the compliance officer.