Ethics concern more than the money markets. Compliance officers ensure that their banks or management companies offer unimpeachable services. Presentation.
The sources of modern banking ethics lie in the USA. According to Bar President Dominique de la Garanderie, “the number of ethical codes has increased as a direct consequence of the legal insecurity created by globalization, which means that companies have to deal with numerous, ever-changing national systems, and from the difficulty of identifying some infringements that may arise from failure to comply with moral obligations”. Pascal Diener sees ethics rather as an investment: “It’s the methodical pursuit of enlightened self-interest, with medium – and long-term benefits. Linking ethics with strategy is an essential condition for lasting success”. According to Professor Hubert de Vauplane, “the collective moral sense having disappeared, it had to be reintroduced into finance in the form of mandatory deontological and ethical standards”.
Legislative and internal origins
Over the last thirty years new standards have emerged. They can be imposed by the legislator or regulatory authorities, they may be professional codes of ethics reflecting the desire for self-regulation within a profession, or they may be the in-house rules of a credit establishment or management company. Their application justifies the existence of a Compliance Officer. These standards cover a broad scope of banking and financial activities and organization, ensuring that clients are served in a balanced, honest and transparent manner, and fully informed about risk. Establishments therefore need to know their clients well. They must also respect the market, make it transparent, preserve its integrity and prevent conflicts of interest. Compliance officers also play a leading role in the fight against money laundering. Finally, they are involved both in training bank staff and in monitoring legislative and regulatory changes. They should guide the managers and staff of banks or management companies through the complex legal and legislative environment. They play a vital role in companies that receive and execute stock market orders on behalf of clients, or make financial investments or acquisitions of holdings. Compliance officers are also involved in the fight against money laundering, means of payment, and even conformity with consumer protection legislation. Their role is thus far from being limited to the capital markets. It covers all aspects of compliance, to ensure that their establishments offer services that are unimpeachable with regard to the law and professional codes. In some countries they are even concerned with social morality (harassment, whistle-blowing). Their position in the management structure should guarantee freedom of action and reporting. On the other hand the compliance officer’s position can be very exposed, as recent court proceedings in various countries have shown.
