Compliance innovation moves fast, but the news moves faster. To keep you and your team up to speed on the latest happenings and goings-on in the compliance world, we’ve aggregated the top five articles from the past few weeks to provide you with an in-depth look at the regulatory ecosystem.
Stay up-to-date and in the know on everything happening in the compliance world as of May 26, 2023.
COMPLY names chief marketing officer – Private Equity Wire
COMPLY has appointed Gayle Nixon as its Chief Marketing Officer (CMO). With a diverse background in MarTech and B2B marketing, Nixon brings over 15 years of experience in scaling and coaching teams to develop and execute growth-and account-based marketing strategies. She joins COMPLY from Litera, a legal tech firm, where she held the position of Senior Vice President of Marketing.
Prior to her role at Litera, Nixon served as the Vice President of Digital Marketing and Demand Generation at SS&C Intralinks, the Senior Director of Global Demand Generation at Rocket Software, the Chief Marketing Officer at itslearning AS and the Director of Global Marketing and Demand Creation at Trillium Software.
With Nixon’s appointment as CMO, COMPLY is poised to strengthen its marketing efforts and enhance its market presence in the financial services sector.
COMPLY’s Johnson: ‘Don’t Be Apologetic!’ – Author Michael Madden
Helen Johnson, the Chief Technology Officer (CTO) at COMPLY and Pathfinder Awards winner, met with Wealth Solutions Report and shared her inspiring journey in technology and financial services, speaking about bias in financial services and technology, the need for inclusion and how women of AAPI heritage can reach the C-suite in wealth management.
Johnson said, “Looking back, it wasn’t one individual event or person that inspired me… but a series of events, people and their opinions and advice that led me to where I am today.”
During the interview, Johnson also highlighted the biased assumption that AAPI individuals are mathematically or technically inclined. She said, “We are assumed to be good in this space – an assumption that is detrimental to AAPI individuals who do not fit into this stereotype.” She emphasized the need to acknowledge cultural biases in promotion, reporting and salary decisions, sharing examples of AAPI women being overlooked or excluded from conversations. Johnson also emphasized the importance of recognizing the language barrier faced by AAPI individuals, as judgments based on accent or communication style can lead to dismissal. She drew attention to the importance of creating an inclusive environment that values diversity in language and communication styles, benefitting both individuals and the industry as a whole.
She advised women of AAPI heritage who aim for the C-suite in wealth management to, “always be true to yourself. Recognize your strengths and play up to them. Recognize your ‘blockers’ and work to diminish them.”
Harnessing the growing compliance burden – Private Equity Wire
In an interview with Private Equity Wire, Amy Kadomatsu, CEO of COMPLY, highlighted the challenges faced by compliance officers in keeping up with reporting regulations and the increasing complexity of the industry.
She said, “Compliance officers and teams cannot afford to have an incomplete picture of their firm’s activities.” Kadomatsu emphasized the significant challenges posed by siloed data sets and disparate platforms, stating that “siloed data sets, which often live in various Excel spreadsheets or disparate platforms, present significant challenges because compliance personnel must review multiple reports to achieve a comprehensive view of potential red flags.”
Kadomatsu pointed out the countervailing trends faced by compliance teams, as the market pressures firms to reduce operational costs while the Securities and Exchange Commission (SEC) intensifies regulatory and enforcement activities. She noted, “While most of the market is dealing with pressures to reduce the costs of their operations due to a muted M&A and IPO environment, the SEC is ramping up its regulatory and enforcement activities in a way that indicates compliance teams should be increasing their spending.” For example, the recently approved amendments to Form PF will require that new, detailed information be filed regularly and, in some cases, more frequently for certain fund stress events.
Additionally, she highlighted the increasing compliance obligations for private equity firms and the growing need for a trusted and comprehensive compliance partner like COMPLY, stating, “The ongoing regulatory focus on private fund advisers, expanding global regulatory requirements to protect consumers and the rapid advancement of technology is creating a perfect growth environment for firms that provide comprehensive tech-based solutions and are supported by in-house regulatory experts like COMPLY.”
Study Up! SEC Reg BI Bulletins Will Be Used in Exams, Compliance Pros Say – Author Melanie Waddell
During a panel session at the Financial Industry Regulatory Authority’s (FINRA) annual conference, top compliance officials emphasized that the bulletins on Regulation Best Interest (Reg BI) issued by the Securities and Exchange Commission (SEC) do not create new rules but will serve as guidance for examiners. Additional, key takeaways from the panel included:
- The SEC’s prescriptive guidance expands the Care Obligation to include investment advisers.
- This expansion emphasizes the need for investment advisers to consider various alternatives when providing advice.
- Investment firms should use the bulletins to clarify their understanding of the rule and anticipate examination-related questions.
- Investment firms should align their practices with the guidance to ensure regulatory compliance.
What keeps these top securities regulators awake at night? – Author Bruce Kelly
FINRA recently held its annual conference in Washington D.C. At the conference, Christopher Kelly, senior vice president and acting head of enforcement at FINRA, and Gurbir Grewal, director of the enforcement division at the SEC, expressed their concerns about various issues in the securities industry.
Kelly highlighted a pattern where a small number of brokers exploit the different fee structures between broker-dealer and investment adviser accounts by moving securities back and forth. This practice, known as B-D/IA arbitrage, allows brokers to charge both commissions and fees, resulting in double-dipping. Kelly cited a specific case where a broker sold clients variable annuities in their brokerage accounts, charged a commission and then swiftly moved the securities to an investment advisory account to charge a fee.
Grewal, on the other hand, raised concerns about unregistered dealers of cryptocurrencies and the opaque $21 trillion private investment fund market, pointing out issues related to unregistered intermediaries, expenses, conflicts of interest and the accuracy of valuations within private funds.
These issues raise significant challenges for investor protection, compliance and the integrity of the financial markets.