In finance, front office takes on governance role

London

ACROSS the financial industry, compliance departments have mushroomed in size since the crisis of 2008. More recently, though, many banks and brokerages have established a governance framework commonly referred to as the three lines of defence. In this arrangement, the first line is the business itself, which is wholly accountable for the actions of the employees within it; compliance is the second line; and audit the third, providing support and regulatory guidance on best practices.

What's driven this development around the globe are regulations - such as the UK's Senior Managers and Certification Regime - that increasingly call for accountability from financial professionals. Senior staff must now demonstrate supervision of a range of actions that their teams undertake on a day-to-day basis. So responsibility for trade and communications surveillance, which historically sat within compliance, is now embedded in the everyday workflow of front-office personnel.