Managing compliance risk after MiFID

Purpose - The purpose of this paper is to focus on changes in the compliance function within major European banks and other financial intermediaries and on the effects of Markets in Financial Instruments Directive (MiFID) implementation.Design methodology approach - The four areas of research seek t...

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Bibliographic Details
Published in:Journal of financial regulation and compliance 2013-02, Vol.21 (1), p.51-68
Main Authors: Musile Tanzi, Paola, Gabbi, Giampaolo, Previati, Daniele, Schwizer, Paola
Format: Article
Language:English
Subjects:
Annual reports
Asset management
Banking industry
Banks
Boards of directors
Committees
Compliance
Data collection
Foreign subsidiaries
Organizational structure
Questionnaires
R&D
Regulation of financial institutions
Research & development
Responsibilities
Retail banking
Risk management
Studies
Values
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Summary:Purpose - The purpose of this paper is to focus on changes in the compliance function within major European banks and other financial intermediaries and on the effects of Markets in Financial Instruments Directive (MiFID) implementation.Design methodology approach - The four areas of research seek to answer the following questions: Is the positioning of the compliance function "at the top" of the organizational structure? Are the roles attributed to the compliance function, their knowledge and their instruments consistent with their responsibilities? Do the methodologies applied follow a qualitative and or a quantitative approach? Is the interaction between the compliance function inside and outside the structure appropriate to the goals of compliance? In total, 31 top international groups based in Europe were invited to take part in the research, 16 of them accepted.Findings - The authors observed a resolute adjustment to the regulations in terms of macrostructure and high levels of compliance function competences in investment services and business knowledge, with a low variation. The encouraging news coming out of the results of the research is the confirmation of the presence of a connection between the compliance function and both the system of values and of incentives.Originality value - The paper's international sample offers a unique opportunity to highlight the critical areas of the compliance function within international groups, with growing operational complexity in a framework of principle-based regulation.
ISSN:1358-1988
1740-0279
DOI:10.1108/13581981311297821