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The staff of the SEC recently stated that a competent Chief Compliance Officer (“CCO”) must develop in-depth knowledge in nine areas.  A CCO must:

  1. Have first-hand knowledge of applicable laws and regulations including relevant exemptive orders;
  2. Develop a deep understanding of the firm and its operations and structures;
  3. Identify conflicts of interests and how they are reported and resolved;
  4. Understand the firm’s clients and products and how they affect profitability;
  5. Understand the firm’s compliance and technology platforms;
  6. Have detailed knowledge of the firm’s compliance policies and procedures and how they are applied and monitored;
  7. Gain an understanding of the markets in which the firm operates;
  8. Create an environment that puts the customers’ interests ahead of the firm’s interests such that the firm does what it should; not what it can.

The staff further stated that CCOs need to understand what they do not know and how to fill those subject matter and competency gaps.


This newsletter is published as a source of information only for clients and friends of The Securities Law Group and should not be construed as legal advice or opinion on any specific facts or circumstances.  The mailing of this publication is not intended to create, and receipt of it does not constitute, an attorney-client relationship.

The Securities Law Group
James Grand