Speech by SEC Staff:
Remarks at the CCOutreach National Seminar

by

Carlo V. di Florio1

Director, Office of Compliance Inspections and Examinations
U.S. Securities and Exchange Commission

SEC Headquarters
Washington, D.C.
January 26, 2010

Thank you Chairman Schapiro. Good morning everyone.

I share Chairman Schapiro's sentiment and respect for the incredibly important role that Chief Compliance Officers play in protecting our capital markets. I also share the sentiment of the fundamental principle that Chairman Schapiro articulated — that investor interests should come first.

Very early this morning I went for a jog on the National Mall. I had worked late last night, had not completed as much as I had hoped to, and was tired and hungry. I was nearing the end of my jog, so I slowed my pace down as I approached my hotel. Just then I heard a sound. As the sound got closer, it became clear that it was made by a group of Marines running. I am sure they too were tired and hungry. But unlike me, they were carrying a log on their shoulders. It was an enormous log — I cannot imagine how much it weighed. They had to run together in lock-step in order to carry the log and run their path. And I am sure their path was a lot longer than mine.

I stopped and watched them for a moment. And, I thought that this served as an interesting metaphor for our conference here today. Just as we, as a public, look to the Marines to protect the safety and security of our country, the public looks to us — the very talented and dedicated SEC and FINRA staff, the examination corps, and Chief Compliance Officers in the industry — to protect the transparency, integrity, and accountability of the capital markets and the firms operating in the capital markets.

As I watched the Marines run off, I picked up my pace. I found a little more energy, just as you find more energy when you are asked to do more with less, with fewer resources, and are asked to work harder and longer. I am mindful of the incredibly important work that you are doing, whether you are a regulatory examiner or a Chief Compliance Officer in the industry , so I want to thank you first and foremost in my first discussion with you as OCIE's Director.

Since subsequent panels will focus on specific compliance risks, hot topics, and issues, I will focus on general compliance programs. I thought that I would share with you my view, and what I believe is a view shared by many in the examiner corps and by the Chief Compliance Officers community, on what the fundamental elements or pillars are for an effective compliance and ethics program. I will reflect on just ten of these elements today. I look forward to having a robust dialogue with you around these elements and others going forward:

I trust that many of you also share the appreciation that, to be effective, compliance and ethics programs cannot exist in silos. Instead, I believe they need to be ingrained in the DNA of the organization and the decision-making framework of the organization. They need to be imbedded in the business process and at the table when strategic decisions are being made and new products are being developed. They need to be an integral part of performance measurement and management processes. And, they need to be part of the way business is done. After all, compliance programs and the work that you do every day add tremendous business value. They protect the business, they enhance the brand, they ensure that reputation is protected and that reputation risk is managed.

Chairman Schapiro touched on many of the reforms and improvements that we are making, so I won't repeat them. You will also hear about specific compliance programs over the course of the day. We look forward to dialoguing with you around them today. However, I would like to note a few key themes Chairman Schapiro touched on:

I would like to close by thanking you for coming together today to celebrate this joint broker-dealer and investment adviser seminar. I am very excited to join this dialogue, I am very excited to join the tremendously talented and dedicated SEC and OCIE examination teams, and I very much look forward to having an on-going dialogue with you.

Thank you very much.


Endnotes