The use of generic, off-the-shelf compliance programs by asset management firms is a mistake, according to Gene Gohlke, associate director of the office of compliance inspections and examinations at the
Speaking at the agency’s latest CCOutreach session, the official said that compliance staff members who encounter a generic compliance system often conclude that the firm’s efforts are inadequate.
The SEC official said compliance systems need to be tailored to the relevant facts, circumstances and potential conflicts at individual firms. At best, pre-packaged systems can be a starting point; they should not be the end of a firm’s compliance effort.
If such systems are the mainstay of a firm’s compliance program, it can lead agency personnel to come back with a long list of requests for information. In the absence of a specifically tailored compliance effort, regulators assume that the burden for uncovering potential problems rests with the agency.
Gohlke, who acknowledged that it is true that all firms are engaged in providing investment advice, maintained that each firm’s business is too idiosyncratic for the one-size-fits-all model to work.
