The importance of the compliance function. The role of financial instruments compliance within banks.

Abstract

The great financial crisis (GFC) showed important weak spots in the financial system, more in details it was observed a lack of regulation and supervision by competent authorities; for these reasons the years after were characterized by a re-assessment of the entire sector, introducing more compelling laws, policies, and guidelines, and enhanced the ones already put into force. In the lights of the new framework, the compliance role gained great importance, especially in banks, ensuring the right interpretation of the law, and moreover providing a risk defense line for credit institutions. The focus of the thesis is to emphasize this function and role, aiming at identifying the duties not only as fulfilling laws and policies, but highlighting the fact that this discipline shall be considered as part of the bank’s culture and that its role goes deeper. Furthermore, the object of the work is to address the role of the compliance function within banks emphasizing the importance of the division in monitoring financial instruments and their restrictions, to prevent the risk to arise, to provide more transparency and lastly for investors’ protection. Indeed, the thesis focuses on the role of securities compliance, by observing the impact of the regulations entered into force in the aftermath of the crisis and how these impact banks.