Regulatory Round Up - October 2024

At True West, we know the importance of building a strong “culture of compliance” within the firm, something the SEC continues to focus on during their examinations. Compliance should be viewed not just as a regulatory requirement but as a core business value. Firms with robust compliance programs can avoid significant risks and enhance client relationships through transparency. Former Director of the Securities and Exchange Commission’s Office of Compliance Inspections and Examinations Lori Richards said, “A culture of compliance doesn’t happen overnight'—it requires continuous effort and dedication.”

The importance of a culture of compliance begins with leadership, or the "tone from the top." When senior management actively supports compliance, it sends a clear message that it is a core value at the firm, not just an obligation. The leadership sets the foundation for a firm-wide commitment to ethical practices. Additionally, empowering compliance officers with the necessary resources and authority is critical for them to effectively enforce policies and safeguard the firm from risk. Further, fostering a true culture of compliance requires the involvement of all employees, with everyone understanding their role in protecting clients and maintaining trust with clients and investors.

Compliance isn't just about following rules; it’s about continuous improvement, which involves regularly assessing risks, updating policies, and holding individuals accountable. By embedding these principles into daily operations, firms not only meet regulatory expectations but also build a stronger, more resilient organization​.