Compliance is a continuously evolving and complex field that, especially in today’s interconnected world, must be sensitive to the macro outlook and many unknowns facing investors. The global nature of business also means identifying regulatory and cultural nuances is critical to ensuring compliance processes are robust and applied consistently.
And best practice does not stop within the organisation. Ongoing dialogue with regulators is paramount, says Kapil Kirpalani, CCO for APAC at KKR. Establishing relationships during the good times sets the tone for the overarching compliance culture, and creates a solid foundation to fall back on if a contentious situation arises.
Paul Caulfield, GC and CCO at Third Bridge, echoes this sentiment with “know your regulator, communicate the good, the bad and the ugly with them”. New business is a prime springboard for regulatory outreach, Kirpalani adds. Explaining growth strategies prior to an application means the regulator is familiar with the reasoning – and knows the business is serious about its plans.
Caulfield also notes that politics is local – and so is risk. “You really have to understand what the risks are based on your region, based on your business line, based on your legacy.” As discussed in this episode, culture is “very, very difficult when you’re global”. Ensuring the senior bench reinforces the compliance ethos all the way through to the belly of the company is therefore crucial.
“There isn’t a day where there isn’t a new law or a new provision we need to be sensitive to.” – Kapil Kirpalani
And what keeps these busy compliance officers up at night? One example is friction between the US and China which is causing “a lot of tension”, Kirpalani says. But also, “there isn’t a day where there isn’t a new law or a new provision we need to be sensitive to.” In another example, Caulfield points to the SEC’s recent focus on shadow trading, which broadens the parameters of insider trading. As he says, compliance never stops. “It’s always evolving.”
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The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.
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