eFinancialCareers

If you want to work in the compliance area of an investment bank, brokerage, mutual fund company or other financial institution, you'll need a healthy respect for rules and regulations. It's the job of compliance professionals to make sure financial firms operate within the rules set by government regulators.

In addition to interpreting the complicated and ever-changing external regulations that regulators lay down, the compliance function creates a system of rules to apply those regulations internally. Compliance officers then communicate these rules to a firm's employees, and work to enforce them.

In the U.S., the primary regulatory body overseeing the financial markets is the Securities and Exchange Commission, or SEC. Its main goal is to protect investors and maintain the markets' integrity. Another important overseer is the Financial Industry Regulatory Authority (FINRA), a private-sector body created in July 2007 by combining the oversight functions of two long-standing self-regulatory organizations, the National Association of Securities Dealers and the New York Stock Exchange.

In the financial sector, the compliance function is usually split into teams. These include money laundering specialists, training specialists, monitoring specialists, and advisory and product specialists. Virtually no document that’s going to be released to the public -from marketing materials to financial reports - gets out the door without being reviewed by a compliance specialist. In many cases, that review is conducted by an attorney.

Many corporations outside of the financial sector have also begun to establish compliance staffs. This is one result of the Sarbanes-Oxley Act in the U.S., which established new rules for how public companies must report their financial results. The top compliance officers at non-financial firms are often referred to as "corporate compliance officers," where in the financial world they're known as "chief compliance officers."

Business consulting practices have also been adding compliance expertise, which they sell to clients as part of broader "risk management" programs. These consultants help clients understand business risks, determine acceptable levels of exposure, implement control programs, and provide ongoing tools for measuring and monitoring the effectiveness of a company's compliance program.

Roles and Career Paths

Jobs in compliance vary depending on the area in which you work. If you opt for money laundering, you'll spend your time on the lookout for suspicious transactions. For example, if someone pays cash for a very large quantity of bonds, it's likely to warrant your attention - particularly if that person or organization has never dealt with the bank before. In the U.S., money laundering officers report to the Financial Crimes Enforcement Network (FINCEN) of the Department of the Treasury.

Compliance training specialists focus on internal controls. While money laundering teams are identifying financial fraudsters, training specialists preach the compliance message to a bank's employees. They create and present training courses explaining what the rules and regulations are, and why bankers need to follow them.

Monitoring specialists look out for infringements of rules and regulations that suggest employees are up to no good. Much of this role has been taken over by computers, which can monitor billions of e-mail messages per day and spot unusual activities such as dormant trading accounts that suddenly spring back to life.

Compliance advisors interpret regulations and apply them to particular business areas and products. An increasing number are product specialists who offer advice on particular types of financial products. Product specialists sit on or near the trading floor, tell traders whether or not a particular trade can go ahead, and suggest alternatives that will still be satisfactory to the client. Compliance advisors need to know a lot about trading and about the products they're advising on. Some are ex-traders.

If you don't get onto an investment bank's compliance training program, there are a few other options. One is to train with the SEC, which has training programs. Another is to work for the compliance consulting arm of an accounting firm like KPMG or PricewaterhouseCoopers.

Skills and Qualities

- Self-confident and assertive
- Competent understanding of legal issues
- Methodical