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Examining and Managing Risks Associated with Outsourcing Compliance Functions  

Author:  Daren R. Domina.; Timothy J. Piscatelli.

Source: Volume 54, Number 03, February 1 2021 , pp.33-40(8)

Review of Securities & Commodities Regulation

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Outsourcing compliance functions is a growing practice at financial services firms. In this article, the authors describe the reasons for outsourcing, and the risks of the practice for investment advisers and broker dealers. They then turn to liability risks for internal and outsourced chief compliance officers and for financial services firms using outsourced companies. They conclude with notes on managing such risks.

Keywords: SEC Rule 206(4)-7; Investment Adviser Compliance; Broker-Dealer Compliance

Affiliations:  1: Haynes and Boone, LLP; 2: Haynes and Boone, LLP.

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