Compliance officers must work to demonstrate the value of compliance to senior management, Paul Bourque, senior vice president member regulation at the Investment Dealers Association, told an IDA continuing education seminar last month in Montreal.

Bourque said that dealers’ chief compliance officers, “must do more than demonstrate an understanding of supervisory systems and regulatory requirements in an environment of increased risk and shrinking resources. They must make believers of senior management.”

“They must measure and demonstrate the value of compliance to their organization,” he stressed. “Advocacy based on principle is important but data is even more important. The ability to provide cost and performance measurement will overcome internal barriers and improve the perception of compliance within the organization.”

“Ensuring a culture of compliance is not the ultimate responsibility of the compliance officer,” he allowed. “Nevertheless, compliance officers have a critical role to play in the implementation of ethical behavior by pinpointing behavior to be rewarded. A firm with a culture of compliance as evidenced by daily ethical decision making at all levels of the organization will have fewer client complaints, fewer civil claims and fewer problems with their self regulators.”

“An effective partnership between SROs and industry compliance professionals is critical to investor protection and efficient capital markets,” he added. “SROs must be reliable partners as well. They must do all they can to support the role of the compliance officer through training, proficiency standards, supervision policies and effective enforcement action.”

He added that the IDA is developing a chief compliance officer course. The objective of the course is to, “ensure a common level of understanding of the nature of compliance systems, the roles and relationships of various parties, key skills of compliance professionals, and the analytical tools, systems and procedures needed to build and operate a properly functioning compliance system.” The course is scheduled to be implemented in the second quarter of 2006.

Also, a new subcommittee of the Compliance and Legal Section of the IDA has been created to deal with the role of the compliance officer. It will develop the mandate of the role of the compliance officer and compliance department; develop educational tools to ensure high standards of proficiency and professionalism; ensure a common understanding of compliance standards, accountability and liability between SRO and compliance staff’ review issues, trends, policies and rules; and, develop policy recommendations that support the role of industry compliance.