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Compliance
Definition
This is the department or person in charge of ensuring that the actions of an investment firm are in compliance with the rules, regulations and laws of the governing jurisdiction.
Using the term Compliance :
Before the trader bought shares of stock in IBM, a company that was currently working with the firm on a new share issuance, he cleared his trade with compliance in order to ensure he was clear to proceed with the trade.
Pay Special Attention To :
The compliance department's primary mission is to ensure that the firm operates ethically and within the stated rules of the jurisdiction in which they operate. Before working with an investment manager, you should ask questions about their compliance department and how they handle related regulatory matters. You can also check the SEC and NASD websites if in the U.S. to see if the firm in questions has had any regulatory problems in the past. Interviewing the chief compliance officer is also an appropriate step.
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Related terms
'Compliance' appears in the definitions of these other terms:
Back Office Operations Global Investment Performance Standards (GIPS)
