Compliance Risk in the Evolution of the Investment Services: an Empirical Study

This study analyses the state and the evolving scenario of the Compliance function by banks and investment companies. It is the first time that an empirical study focuses on the Compliance risk of the investment services, showing the contribution of the Compliance function during the implementation phase of the MiFID European Directive, within the reality of different companies, established in Italy. The research has looked at the present state and the progressive scenario of how banks and investment companies have put compliance into practice. Thirty-five financial firms took part in this investigation which was carried out in banks and investment companies. Due to the large number and variety of the sample, it was possible to differentiate the results using a double set of criteria: a) Financial intermediaries (FI) frequently working either internationally or domestically; b) Intermediary typology, this is to say banks or other financial intermediaries (asset management companies and investment companies). With reference to the contents, the research is split up into four survey areas: 1) positioning of the compliance function in the organizational structure; 2) roles attributed to the Compliance function; 3) methodologies for measuring, transferring and mitigating Compliance risk in investment services; 4) mode of interaction between the Compliance function inside and outside the structure.