Let’s start 2013 by focusing on one of your greatest risks: not meeting the compliance standards of the firm or the regulator. It’s a risk that can cost dearly in the form of penalties, reputation and negative media attention, and one you cannot afford to take.
Only through effective supervision can failures to uphold the firm’s and the industry’s practices and standards be detected. But is your firm’s supervision robust enough to catch these instances before it is too late?
What Is At Stake And Why
The obligations of a supervisor, such as a branch manager, are many and can present significant challenges for the firm as well as for the supervisor. Regulators, such as Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Associations (MFDA), design their examination programs to detect failures to adequately supervise. Such failures can lead to enforcement proceedings taken against firms, officers and supervisors.
Statistics published by IIROC for the 2011-2012 period show that there has been a significant increase in the dollar amount of fines assessed and the number of supervisions imposed (40 per cent greater than 2010-2011). Perhaps even more damaging are the negative effects on reputation that come with any notice of proceedings taken by regulators against firms and advisers.