Exploring the Advantages of Outsourced Chief Compliance Officer Services

Newly established investment firms need compliance oversight to make sure they follow the correct regulatory procedures. An outsourced chief compliance officer (CCO) provides services to help firms meet regulatory obligations. The CCO may offer ongoing, scalable support and specialized knowledge of best practices; this allows firms to close compliance gaps and be prepared for reviews. Here are a few advantages of outsourced CCO services:

Specialized Compliance Expertise

An outsourced CCO manages a firm’s compliance program, so the company doesn’t need to hire an in-house role. This is ideal for small firms or ones that are building a new compliance program. The employees can focus on business operations while the outsourced CCO handles regulatory compliance. Outsourced CCO services involve:

Creating a Compliance Program

Firms need customized programs, since standard ones won’t account for individual processes. An outsourced CCO learns about a firm’s practices, and they tailor the program to the business’s specific products and services. They may develop the program to include areas such as: 

• Advertising and marketing
• Regulatory filings
• Books and records
• Employee compliance
• Cybersecurity

Developing Written Policies and Procedures

Chief compliance officers help develop written policies and procedures. This includes Written Supervisory Procedures (WSPs), which show who is responsible for different practices and how the firm will monitor those activities. CCOs can develop WSPs before a change happens, such as a new product launch, so the firm makes sure it aligns with regulatory obligations.

The CCO provides ongoing maintenance support, helping firms keep policies and procedures current. CCOs update outdated policies, and they can determine if past ones still work. This allows the CCO to address any compliance gaps and implement changes before a review. 

Completing Annual Compliance Reviews

Annual compliance reviews are a regulatory requirement for investment firms, and an outsourced CCO helps conduct them. The review verifies that existing policies are still relevant and adequate for the business’s current operations. An outsourced CCO provides an objective perspective, and it can identify where corrective action is needed. Finding issues in a compliance program during this review allows firms to address them before they escalate. Some CCOs determine what issues need to be addressed promptly and who is responsible for managing them. The CCO also documents findings to maintain efficient practices.

Scalable Compliance Support

Compliance needs often change as business operations grow; this may include when a company adopts new business activities, adds assets, or expands into different states. Hiring additional employees in new roles may also require compliance updates. Some CCOs help create effective training on new policies and establish supervisory responsibilities for employees.

Support for compliance practices evolves based on a firm’s current needs. A firm may only need an outsourced CCO on a retainer basis; it allows them to have specialized support for specific projects. Some firms with an in-house CCO outsource certain day-to-day activities, such as conducting tests or inspections. This allows them to maintain their current compliance structure while benefiting from external knowledge of industry-wide best practices. Because many outsourced CCOs have worked with many businesses, they are able to scale operations up or down, based on previous experience with similarly sized firms.  

Oversight and Regulatory Preparedness

Outsourced CCOs provide ongoing oversight of daily regulatory requirements, so firms can maintain compliance. With access to personnel, management, records, and any other pertinent information, the CCO is able to accurately align the firm’s operations with regulatory requirements. This hands-on approach makes sure the CCO is aware of any changes and quickly incorporates them into the compliance program. Consistent oversight may help CCOs:

• Find issues that require the attention of management 
• Handle communications involving compliance issues
• Keep track of compliance activities
• Resolve issues so they don’t create compliance gaps
• Test if procedures are being followed

Use Outsourced CCO Services

Outsourcing the chief compliance officer role provides varied advantages for firms. A regulatory consultant company can help firms whether they need fully outsourced CCO services or assistance in a few areas. CCOs help develop a compliant program, so firms have proper policies and procedures that adapt as their business grows. The CCO tests the program to verify it works in practice; this allows them to adapt policies and fix compliance issues. Contact a consultant company today to explore their CCO services and see how they can help firms maintain compliant practices.