Have the jobs of compliance officers been professionally recognized? In today's society, we typically define a professional field by the establishment of a well recognized professional association together with a qualifying examination (as a barrier to entry). By this standard, of course legal and accounting fields are professional, whilst compliance field is not.
Compliance jobs dominate in the financial industry because it is key sector in HK and is highly regulated. Following the continuous tightening of financial regulations, the burdens of compliance officers are getting heavier. Nevertheless, the barrier to entry in this field is low in the sense that people from other fields (e.g. audit, risk management, operations and even sales) can easily transform themselves into compliance officers. If they enter into this field at a junior level, I don't see there is any big problem. But how do you think if a senior level person without compliance background pretends to be a compliance expert? I had seen a Head of Compliance who was ignorant of all regulations and lacking in compliance sense but managing a large compliance team!
Well, shall a professional education system set up to maintain the minimum quality of the compliance field? I am open to this topic. In overseas countries, some universities have organized Master degrees about regulations and compliance. In HK, I think the LLM in Corporate & Financial Law offered by HKU is the most relevant program. As a graduate of this program, I would say it is actually a series of professional compliance seminars. I opin that regulators and compliance officers may benefit from this program more than lawyers.
If I was invited to design a higher education program to train new compliance officers of the financial industry, I would include not only financial laws and regulations, but also related disciplines such as accounting, economics, finance and risk management. I view compliance as a social science as it is about human behaviors. Therefore the program should also cover some topics in psychology, politics and people management.
There was discussion on the topic of cold-calling among the marketing people the other day including some very senior people. I presumed it would not be long before the buck was passed to me.
ReplyDeleteI started my preparation.
I went through the SFC online Handbook hoping to find relevant material. I went to Part A of Volume 2 – Business Standard first because I believed this topic was more relevant to securities dealing. I skip Licensing of Intermediaries as I was pretty certain cold calling has nothing to do with licensing. I went straight to Continuing Obligation of Licensed Persons (as this section is comparatively relevant). I found nothing. Then I went to other sections of the Handbook likely to contain info on cold calling. Eventually I found one circular dated 12 Nov 2002 exactly on Cold Calling. Yet, it quoted S74 of the SO. ( I needed present state of law!)
I went through the Contents table and Sch. 1 of my pdf copy of the SFO. There was no such term of “cold-calling”. I suspected there could be another term for cold-calling. I started focusing on the word “call”. I went through the Contents section by section and eventually I noticed the term “unsolicited calls” under S174. I looked up the meaning of “unsolicited” in my Longman and realised I had found my target.
I went through S174 and the following sections to confirm that S174 what I needed was to focus on S174 only and not others. I had to do other steps.
I understood that there could be Rules on any topics. I found the 2-page pdf verion of the Exclusion Rules. I knew that that was not the end of the story. I then reviewed the FAQs. I found something useful. Then I realised that cold-calling related to selling of investment products. I went through the above steps but on the topics of investment products, CIS etc.
I went through S174 and the Rules. I looked up definition of “nouns”, “adjectives” and “strange terms” in Sch.1 and beginning of the Part, Division (interpretation), and beginning and end of the section and Rules.
Apart from the above, I also browsed the data privacy commission’s website because I believed cold-calling had something to do with person data (e.g. tel. No; names). I was lucky to found something relevant and useful for my understanding of the topic (yet not directly helpful to solving issues under the SFO)
Eventually I answered some questions from them.
Comments on my approach? Better ways to get an understanding of something followed by giving an advice?
Realised what I wish to exemplify?
Compliance is about:
Good understanding of written languages (English and Chinese).
Accessible to useful information.
Patience and persistence.
Research skills.
Know how the SFO is structured (Contents, Schedules, Interpretation, Parts, Divisions).
Common sense.
I am not well educated like others.
I forgot to mention I browsed through almost every enforcement actions during the past few years on the topic of cold-calling.
ReplyDeleteSubsequently I also read the MA SB-1 and SB-2, Code of Banking Practices.
While I believe that “compliance” deserves to be recognised as a “profession” like the legal and the medical. I have reservation about this presently. I have sympathy for those working under an incompetent head of compliance. This happens in other fields as well. I have also seen bank audit chiefs without knowledge of banking practices. They got the job because of their big-4 background and their so-called experience in balance-sheet auditing banks. Auditing a bank for the purpose of satisfying statutory requirements, I believe, is one thing while internal auditing in a banking environment is another. (For your info, a bank auditor association has been established in the U.S.) Those audit chiefs I mentioned above certainly would gain more experience/knowledge in banking practices as time passes by. The compliance head you mentioned would have the necessary knowledge and skills of an experience compliance officer one day. What you commented about was their luck to earn more. I understand that this discussion has departed from your initial ideal of opening this blog, yet because someone really to transform this field into a real profession like the legal and medical, one have to think twice and more on the questions of (not limited to): what is a real “profession”? is it necessary for the job of compliance be done by real compliance professional? What is compliance? … Perhaps this will lead us to theoretical discussion before reall
ReplyDeleteCorrection : "... because someone really to transform..." should read as "... before someone really wants to transform...".
ReplyDeleteI forgot to mention, the HKMA is preparing an supervisory guideline entitled along the line of "audit, compliance and legal". Perhaps, this will give a definition of Compliance (scope of responsibility, duties under the MA regime, relationship with other parts of the organisation etc), at least in the sector of AIs. This will give an ideal of how this profession be shaped.
ReplyDelete