Chambers Dictionary definition

a yielding / agreement to assent.

Compliance: Everyone's Responsibility

During the 1980's a great deal of emphasis was placed on Financial Services institutions to comply with best practice principles when dealing with customers' requirements, either in a direct selling environment or an advisory capacity - the latter was the subject of much debate and steps were taken to legislate (The Financial Services Act 1986) and grant powers to regulatory bodies to oversee business practice in the Financial Services Sector.

This direction moved companies in that sector of business to issue prescriptive guidelines to staff in order that the organisation was seen to 'comply' with the regulations; this piece is a reflection of what was considered to be a normal approach to these matters at that time.

Compliance Policy Statement

By and large most companies in the Financial Services Sector would issue a Compliance Policy Statement which would be couched in the following fairly broad terms:

Following the establishment of policy, an organisation would normally 'follow up' with an explanatory leaflet to all members of staff which would notionally include remarks about good business practice, compliance arrangements and the key principles involved.

Good Business Practice

Complying with the spirit and the letter of financial services legislation is a major part of the quality of service that the business offers its customers; to this end the business is committed to:

Compliance Arrangements

These would normally set out the chain of responsibility in compliance matters detailing the prime responsibility held by the Chief Executive through the day to day management of the compliance discipline through a Compliance Director.

As part of such arrangements, written procedures would be adopted in each business area to govern the way in which business was to be conducted; the inference was that if all these procedures were followed then all activities carried out would be 'compliant'.

Key Principles

There are a number of key principles which. If followed, with commitment and common sense, would help to ensure that good business practices would pertain to demonstrate a business compliant with regulatory requirements - these were:

  1. Always deal fairly with customers and treat them with respect and courtesy
  2. Ensure all administration with customers is dealt with efficiently and competently and that errors once identified are remedied without delay
  3. Always adhere to the business documented procedures in the activities undertaken
  4. Reporting of any suspected breaches of procedure, however small, at the earliest opportunity
  5. Familiarisation with all the compliance implications at the workplace
  6. If authorised to give advice on company products, then a 'know your customer' principle must be adopted to ensure 'best advice' is given commensurate with a proper analysis of customer needs.

The guidelines to organisations emanating from the Financial Services Act 1986 were the fore-runner of an industry wide soul searching exercise which, sadly, did nothing to mitigate against the extraordinary poor practices which led to the financial services meltdown that unfolded in the early 21st century, which in turn spawned a proliferation of further legislation and regulation of the Financial Services industry.