As the Oct. 5 deadline fast approaches for fund firms to have a compliance chief in place, the majority of firms are prepared, according to preliminary results of a recent study by Diversified Management Resources in Boston.
However, while the majority of firms surveyed have already appointed someone to take the compliance helm, nearly a third, or 30%, said they are unsure of the exact structure of that position. "Of those who did respond to the survey, the vest majority are ready, have designated a CCO, but havent figured out, in some cases, where that person will report," said Charles ONeill, principal at DMR. Funds are required to adopt and implement a compliance program and appoint a CCO and gain approval of the fund board.
Going forward, firms said they would use internal audits and anonymous hotlines to self-police. "There is a high degree of confidence among those people that took the survey, that in the future, any compliance failures will be detected first by their internal sources rather than by regulators, which is good news," ONeill said.
The new requirements also will bode well for job seekers. According to the survey, 60% of the respondents said their employers will add to the compliance staff next year. And the CCO will not likely come cheap, with more than 35% of those surveyed indicating their firm expects to pay upwards of $300,000 for the individual. "We did have some people indicate that $500,000 or above is the range," according to ONeill.
There were participants from more than 150 different companies and included a variety of executives, including compliance professionals, marketing executives and CEOs, among others.