What Is Compliance?

Last June I was called into a conference room and told that my title and responsibilities would be changing to…drum roll, please…Compliance Manager.  Your reaction may be the same as some of my friends and family.  The question I was asked the most when I shared this news was, “What is Compliance?”  Let me share a little bit about Compliance with you.

Many of you may not know that First Covenant Trust and Advisors is chartered in the state of South Dakota with trust service offices in Tennessee, North Carolina, and South Dakota.  Therefore, we are examined by three different state regulators every two to three years. The purpose for the exam is to make sure we are following the state rules and regulations for trust administration.  They check our policies and procedures to make sure they are current with state regulations.  As the Compliance Manager, I help coordinate our exams between the South Dakota Division of Banking and Tennessee and North Carolina state regulators.    

First Covenant is not only examined by the state regulators, but we also engage with an external auditor to perform an annual audit on our company records.  The purpose of the external audit is to make sure we are handling company budgets and finances properly so that we will continue to be a successful and thriving company. 

As the Compliance Manager, I perform internal audits on trust administration activities.  The purpose for internal audits is to ensure that we are handling every client relationship with utmost care.  Things such as account set up, parties involved, investment management, transaction activities including accurate fee calculations, and proper approval levels for distributions are reviewed in an internal audit.  Another function of the Compliance Manager is to keep our Policy & Procedure Manual up to date.  I coordinate with our staff to review every policy in our manual on an annual basis. State and federal websites are checked on a monthly basis for legislative updates and memorandums that may affect the way we do things at First Covenant. 

Whenever there are new regulations that impact our company, I help manage how compliance with those new rules is integrated into our process.  For example, in the last few years there have been significant changes to the Bank Secrecy Act/Anti-Money Laundering (BSA/AML) regulations.  We have been diligent to keep our BSA/AML program up to date.  We recently engaged with a consulting firm to review our BSA/AML program so that we will have a program in place to efficiently serve our clients.  A more recent change in regulations is the Corporate Transparency Act.  More on that in an upcoming newsletter article. 

In a nutshell, compliance means to abide by certain rules.  I enjoy my job here at First Covenant because I like structure, order, and having proper procedures in place to help us run more smoothly and efficiently while abiding by these guidelines and rules.  We have received high marks in our audits and exams.  Under my watch as the Compliance Manager, I intend to keep it that way so that our clients will have peace of mind when they choose First Covenant Trust & Advisors.

Leave a Comment

Your email address will not be published. Required fields are marked *