Staffing the compliance unit

Compliance officers typically have experience in operations, audit, legal, or trading.
Within a divisional staff, one needs compliance specialists especially for exchange
traded contracts or equity derivatives. The expertise need will vary by the complexity
of the product and of the regulatory scheme. It may be helpful if the compliance staff
is licensed to the same degree as the sales staff since compliance personnel may in
some circumstances need to talk to a client directly.
The compliance staff should also be cross-trained in a different discipline so that
the firm has a ‘deeper bench’ and so the compliance staff has a better understanding
of activities across the firm. This keeps the staff fresh and rotation allows a new set
of eyes to review the processes. This cross-pollination may also expose areas where
the compliance guidelines have not kept pace with market activities. To increase
their usefulness, a compliance officer should develop a solid knowledge of the
economics of the products being sold as well as an intimate understanding of the
applicable regulations.
Some turnover is not necessarily bad within the compliance function. A new
employee may well discover items that have been overlooked. Alternatively, the new
employee may help identify short-cuts or bad habits that have been allowed to creep
into the compliance process.