In a new blog post, the UK Financial Conduct Authority reported that most corporate finance firms perform key compliance activities, but many need to strengthen compliance functions’ authority, independence and involvement in business decisions. The findings are based on 382 responses to a survey of 411 firms, most of which were small, and emphasize that senior managers must embed compliance throughout the business rather than treat it as a series of administrative tasks. Among respondents, 63% had compliance functions with other business responsibilities, potentially creating conflicts where those responsibilities include revenue generation. While 90% used third-party compliance support, regulatory responsibility remains with the relevant senior management function holder, requiring firms to understand external advice and maintain active oversight. Compliance arrangements should reflect each firm’s nature, scale and complexity, while providing credible challenge, particularly where firms perform public markets roles such as acting as AIM nominated advisers, AQSE corporate advisers or brokers, or listing sponsors. Only 47% of respondents conducted all activities covered by the survey. Reported gaps included incorporating regulatory compliance into staff performance assessments, providing whistleblowing arrangements, maintaining breach registers, monitoring complaints and ensuring compliance participation and reporting at management meetings. The FCA will engage with selected firms to assess the adequacy and effectiveness of their compliance resources and examine gaps in practice.

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