SEC Staff Reminds CEOs Of Registered Firms of Importance of Compliance Programs
Washington, D.C ., Dec. 2, 2008 — The Securities and Exchange Commission's Office of Compliance Inspections and Examinations today issued an open letter to chief executives of SEC-registered firms, including broker-dealers, investment advisers, investment companies and transfer agents, to remind them of the critical role played by their firms' compliance programs in assuring that their operations comply with the law and rules for industry participation and to ensure that the interests of customers or clients are protected.
The open letter follows SEC Chairman Christopher Cox's remarks at the SEC's recent CCOutreach National Seminar, where he said, "Experience has taught us again and again that giving short shrift to regulatory compliance subjects a company's investors, employees, management, directors, and every other stakeholder to unacceptable risks … compliance programs have made huge strides in recent years in becoming more formalized and more robust … Now more than ever, companies need to take a long-term view on compliance and realize that their fiduciary responsibility requires a constant commitment to investors. That means sustaining their support for compliance during this market turmoil, and beyond it as well."
In the open letter, Lori Richards, Director of the SEC's Office of Compliance Inspections and Examinations, wrote, "While many firms are considering reductions and cost-cutting measures, we remind you of your firm's legal obligation to maintain an adequate compliance program reasonably designed to achieve compliance with the law."
There are approximately 11,300 investment advisers, 950 mutual fund complexes, 5,600 broker-dealers and 410 transfer agents registered with the SEC and subject to compliance obligations under the federal securities laws.
Published on: 2008-12-03
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