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New Managers April 2014

SCOTSTONE COLUMN: Go into compliance my child!

Ian Hamilton

This column is authored by Ian Hamilton, who is the founder of IDS Group. IDS provides fund administration services in Africa and Europe through Malta. He is also the founder of Scotstone Investments, a company that has fund structures and services for global emerging new managers.

Compliance used to be the dead end branch in the investment industry. Usually it was somebody whose career was stuttering elsewhere in the company. The compliance officer was an annoyance, someone often obstructive in the day to day operations of the company and also the one who often held up any new developments.

That has changed considerably over the past ten years. Compliance has become almost the epicentre of the company operations and is an all-powerful position in an investment house. So what has changed?

The word compliance is bandied about to easily and in many cases ill defined. Many do not understand that there are two major aspects to compliance and actually can require totally different skills.

Firstly there is the regulatory compliance and that is to ensure that the company operates within the regulatory framework. This is not an easy task with regulations being piled on almost weekly. To add to this regulations are coming from different directions and even different bodies. They are voluminous and need to be interpreted. The volume of regulation and often lack of clarity leads to different interpretation. Just deal with different banks and you will see how differently they interpret the AML regulations!

To understand all this mountain of regulation the person needs to have a legal background, and even more tricky, often a cross jurisdic......................

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This article was published in Opalesque's New Managers a top-down monthly analysis, news and research publication on the global emerging manager space.
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