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Compliance Management in a Small Firm

“It does not matter how well you are doing at the other stuff – compliance can trip you up.”

EBC Financials’ CEO, David Barrett, echoing sentiments that will resonate with anyone running a modern financial services business.

EBC Financial is a fintech broker-dealer, providing trading and execution services for global institutional customers. As a fintech, EBC’s expectation is to be lean, but to use automated systems to ensure the effective delivery of their overall operations.

Management of compliance is particularly challenging for smaller companies. David Barrett explains, “in smaller firms, the compliance officer may have multiple responsibilities. They are easily distracted, and it is often easy for them to miss something that will come back to bite them later. As CEO, I need to know that will not happen.” 

EBC was first authorised by the FCA in February 2021. Operating in the high-risk capital markets sector, EBC expect to have ongoing regulatory scrutiny. However, as an early-stage company, cost management is imperative while also having rock solid regulatory compliance. So, it was important to start the business as it intended to go on.

EBC examined the options. They wanted a compliance management system that was easy to use when at an early stage but would grow with the company and had the sophistication to support more complex operations in the future.

My Compliance Centre was selected as the platform of choice. David Barrett explains: “we primarily needed a system that would save significant cost through the time savings it achieves. I also wanted to know that we were not going to miss anything. I needed a system to act as my eyes and ears daily and to keep me up to date.

We use the Compliance Monitoring Module to schedule our compliance monitoring programme and the Task Management Module to remind us of all the activities we need to carry out. The regular reminders keep us on track.”

The management of regulatory change is also a key feature. “Keeping track of ongoing regulatory changes by the FCA and other regulators is just too time consuming. My Compliance Centre has a data feed of all regulatory changes straight into the system. We just dismiss those that are not relevant and action those that affect us. That saves us time in scanning regulator’s websites and reviewing regulatory update e-mails from consultants and lawyers.”

For many firms, thinking about a future day when the FCA come to visit is a motivating force for how they manage things today. David Barrett is keen to prove to the FCA that the governance of his company, albeit small and at an early stage, is still of the highest quality. “We use the Governance Module to define our committee structure and ensure that all related documents, such as Board minutes and actions, are recorded centrally against the relevant committee. This enables us to easily prove that we are managing the company to a high level of corporate governance.  

Overall, My Compliance Centre provides us with an excellent audit trail, demonstrating the high quality of our regulatory compliance.”  

A final consideration for David Barrett was the future proofing offered by My Compliance Centre.

“I know that some compliance consultancies are offering compliance management systems as an integrated part of their service. I have several concerns with this approach. Firstly, compliance consultancies are not software developers and the systems we saw do not compare in quality to My Compliance Centre, in design, scalability or functionality. Secondly, I would be very concerned about locking ourselves into a single consultancy. My Compliance Centre can move with us if we change compliance consultants in the future and grow with us as a business if we bring compliance in house.”

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