Most licensees will have appointed a Compliance Officer for their business, and if this person isn't formally employed in the role of Compliance Officer, there is generally a person within the licensee who is responsible for the Compliance Officer function. But what is the role of a Compliance Officer? ASIC Chair, Joe Longo's recent speech highlighted the increasing significance of compliance professionals in a changing regulatory environment.
Mr. Longo noted, "effective compliance isn't just about following the rules – it's about fostering a culture of integrity, trust, and ethics within the workplace." While the ultimate responsibility for compliance lies with a licensee's directors, Compliance Officers play a critical role in implementing and supporting these efforts – creating a culture of compliance.
For many smaller licensees, the Compliance Officer function will fall to the Director and with an increasingly complex regulatory landscape, the role of a Compliance Officer includes a wide range of responsibilities.
Mr. Longo emphasised that when Compliance Officers are discharging their duties, they should have a curious mindset. Some key questions for Compliance Officers to consider include:
- What are the authorisations on the AFSL and which obligations does this trigger?
- Are the systems and controls in place sufficient to ensure the company meets its AFSL obligations?
- What are the relevant risks and how can they be mitigated and controlled?
- Is the licensee operating in both a legal and ethical manner? Is the business compliant at a practical level?
- Are the policies and procedures known by representatives and are these procedures being followed in practice?
- Is there additional training to be conducted or support that could be provided?
- Are there open lines of communication at all reporting levels?
- Are representatives monitored and supervised effectively, to ensure compliance with a licensee's policies and procedures?
- Do the risk management systems include adequate measures for managing risk?
Secondly, ASIC expects AFS licensees to be transparent and accountable when it comes to compliance incidents. Licensees must implement effective incident management procedures to ensure quick responses and clear communication with affected customers. Compliance Officers also need to turn their mind to any breach reporting obligations, including any investigation, notification and compensation obligations which apply to the licensee.
Thirdly, ASIC expects directors of a licensee to educate and equip themselves to set the tone and foster a culture of compliance. Much of this work will be done in consultation and with the support of a Compliance Officer.
Directors of AFSLs are expected to:
- ensure they are understand the work the licensee does;
- act with honesty and integrity and take responsibility for their role in the actions of the licensee;
- review information and reporting systems, plan for and consider the consequences and risks of all options;
- consider their risk management framework and risk appetite to ensure that the licensee adequately address risks; and
- ensure that the licensee has access to the necessary resources to effectively manage risks.
For further information your compliance obligations as a licensee, or how we can assist you, please contact us.
Click here to read the full ASIC Speech.
Further Reading
- Blog – Attention all Directors! Do you have sufficient knowledge of your company?
- ASIC – Regulatory Guide 104
- ASIC – Effective Compliance: Perspectives from the regulator
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.