News and Press
Beware of rationalising compliance staff

There have been reports of an increased number of compliance staff being made redundant because of lack of resources and challenging economic times.

Suzanne MacDonald, Head of Financial Services Regulation at TLT, comments on the risks of such an approach, "Firms are having to make difficult decisions as to how to respond to challenging market conditions. This may include battening down the hatches, rationalising or selling non core businesses. Unfortunately this can also include redundancies in circumstances where staff can not be redeployed.

Rationalising a core department such as compliance should be approached with caution as a firm must ensure that it can continue to meet its regulatory responsibilities. Redundancies of skilled compliance staff could result in gaps of expertise or the remaining team feeling obliged to take on roles that they have not yet grown into, or simply don't have the time to do. Controls in the business operations could dissipate. What started out as a financial prudence initiative, could result in the contrary if a firm breaches FSA rules.

Before considering redundancies a firm's senior management will need to carry out a risk assessment engaging with the relevant business area as appropriate and including consideration of these factors. A firm will need to be satisfied that any decision it makes is in keeping with its legal responsibilities to conduct its business with due skill care and diligence and that it is responsibly and effectively managing its systems and controls as the FSA requires."