This document outlines the key elements of an effective U.S. financial services compliance program. It discusses seven essential elements: written policies and procedures; a designated compliance officer and committee; effective training; lines of communication; internal monitoring and auditing; disciplinary guidelines; and corrective action. It emphasizes the importance of a robust compliance culture and gives examples of how organizations can implement monitoring, training, and discipline to strengthen their programs. The overall message is that a comprehensive compliance program is necessary for organizations to mitigate risk and avoid the types of scandals that often result from noncompliance.

1. U.S. Financial Services Compliance:
Perspectives & Practice
Bachelor of Law International Seminar
Europäische Fernhochschule Hamburg, University of Applied Sciences
Barbara Boehler, JD, LLM
Adjunct Professor, Compliance Practice Skills, Suffolk University Law School
Adjunct Lecturer, Contemporary Financial Services Compliance Programs: Perspectives and Practices,
Boston University Law School

2. Agenda
1. Introduction & Why is Compliance
Important?
2. How is Compliance Monitored?
3. What is a Compliance Culture?

3. 1. Why is Compliance Important?
Pick a Scandal…Any Scandal

4. 2. How is Compliance Monitored?
The Elements of a Compliance Program

5. 7 Elements of a Compliance Program
1. Implementing written policies and procedures
2. Designating a compliance officer and compliance committee
3. Conducting effective training and education
4. Developing effective lines of communication
5. Conducting internal monitoring and auditing
6. Responding promptly to detect problems and undertaking corrective action
7. Enforcing standards through well-publicized disciplinary guidelines
• U.S Federal Sentencing Guidelines

6. 1. Policies & Procedures

7. 1. Policies & Procedures: Video Discussion
A robust set of policies and procedures, are the foundation of a
strong compliance program.
https://www.pbs.org/wgbh/frontline/article/exclusive-watch-
billionaire-steven-cohen-stumble-over-insider-trading-rules/
Watch the 3d video clip (code is at 15:20:40). How important is it to
“strictly adhere” to the policies and procedures?

8. 2: Designating a Compliance Officer
The role of the chief compliance officer (CCO) is required in some industries.
Review the “Inside the Mind of the Compliance Officer” special report
Consider: What are some of the most important considerations for a chief
compliance officer?

9. 2. Designating a Chief Compliance Officer
Exercise – What is Your Compliance Type?
• Handout “How to Be A Wildly Effective Compliance Officer
Workbook” Kristy Grant-Hart

10. 3. Effective Communication: Three Lines of Defense Theory

11. #4: Training
• It is important to communicate the policies via training to staff.
• Compliance training can be mandated by a regulator (depending on industry)
• Training can be annual, or based on new policies or changes to law.
• Everyone should participate in training.
• Training can also be used to help to cure compliance violations, or
demonstrate required changes.

12. #5: Monitoring & Auditing – Testing Your Program
Why test your policies and procedures?
• Regulatorily Required (depending on industry)
• To determine weaknesses in the program, where enhancements are
needed
Common Tests
Test policies and procedures, periodically (on a schedule), based on
risk,

13. #6: Discipline
What happens when your policies are violated?
Depending upon the severity of the infraction from a warning letter to money
penalties, to termination of employment.
Without repercussions for failures to follow policies, policies may be easily
dismissed.

14. #7: Remediation
When compliance policies are not strong enough, are violated, or are found to
be weak. The compliance program needs to be amended.
A common type of remediation is Training.
Training can help to decrease recitivism.

15. What is a Compliance Culture?
A culture of compliance goes beyond
once-a-year mandated training. It
embeds compliance into the
everyday workflow and sets the
foundation and expectations for
individual behavior across an
organization.