Compliance CF10: To be or not to be?


This is the question many an aspiring mortgage compliance officer should be asking themselves


the board or partners) in respect of that responsibility.


by


Richard Farr, project director, Telos Solutions


The FSA just confirmed a new controlled function for mortgage advisory firms - CF10 compliance oversight. So, to be or not to be?


Existing approved persons, having a


controlled function, such as a director or owner of a firm, may also be asking the same question.


But why now - and why should it be such a difficult decision? Many firms may see this as just another plank of regulatory burden which should be dealt with as the simple filling in of an application form, with no other time spent considering who the right person should be to fulfil the responsibility or what the future consequences for the individual or business might be. Isn’t there enough to worry about at the moment? I know that this view is quite common as I have been talking and writing about the impact of the CF10 role for some time: many people I speak to have put it in a “not now” box or even an “it’s not that important” category. Well, if the industry prides itself on just-in-time delivery, now is the time to take those decisions.


Responsibilities First let’s describe the role itself. The FSA handbook states that the role must be allocated to an individual acting in the capacity of a director or senior manager within a firm. The CF10 has the responsibility of oversight of the firm’s compliance and, importantly, to report to the “governing body” (usually


32 morTgage inTroduCer JULY 2010


Responsibilities for the compliance function include documenting how it is organised and what responsibilities are required throughout the firm, that the right number of appropriately competent staff are able to perform their duties independently and objectively. Also - to quote directly from the handbook - the compliance function “should have unrestricted access to the firm’s relevant records as well as ultimate recourse to its governing body”.


This last point is the most potent weapon for the FSA in obtaining effective compliance with its


regulations and probably, once thought about, is the crux of the problem about who should take on the CF10 compliance oversight function. If a single director or partner


takes responsibility for compliance in a firm, then the decision to appoint that person as the CF10 is pretty obvious, based on the workload and competency of that individual.


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