MattLikesAnalysis Wrote: ------------------------------------------------------- > i also said that the dual reporting relationship > is not good as one should never report to the CIO. > but this could easily be wrong. i don’t think this > exact scenario was in the cfai cirriculum. I think this situation was tested in one of the practice exams but it was about compliance offer reporting to cio (nothing about dual) and it said compliance officer cannot report to cio. I checked q-bank and this is what it says: "Designate a compliance officer who reports directly to the CEO or board of directors and makes sure procedures are in place and followed. "
I don’t recall the issue of dual reporting being in the curriculum. I thought the question asked if the dual reporting was “consistent” with the AMC - which it wouldn’t be since the CCO shouldn’t report to the CIO (which is what I answered). I don’t think that necessarily means that it is a “violation.” I could be wrong, but I thought the concept of “consistent with AMC” was in that question. I am a compliance officer and in the “real world” the reporting is all over the board - some report to the president, some to the board, etc. Other than the CFA’s AMC, I am not aware of any statutory requirement under the Adviser’s Act or the Investment Company Act that dictates who the CCO should report to.
so what were the two no answers—one was dual role, what was the other? if i remember it was way off base. so its either ok, or not ok for dual reporting.
the fact that in the real world these arrangements exist only confirm my belief that the CFA answer of not reporting to the CIO is what they were looking for.
It’s definitely not consistent, I think I would have known that…oh well, it’s turning into what was the question. Before the exam, I knew you are supposed to report to the CEO as a compliance officer and I’m pretty sure you can have dual roles as a compliance officer (basically not every investment firm has to hire a separate compliance, and only compliance officer). F it.
For the dual reporting question the curriculum is clear he should report to the CEO and not the CIO. However, I believe there was some leighway granted for transitions. For the material nonpublic question, I first put didn’t have a reasonable basis but changed to the nonpublic because information on earnings from a primary source is a reasonable basis but combining that with analysis of the trading activity doesn’t seem like it would qualify on the mosaic front because that information doesn’t really enhance the earning information, might be wrong on this one though…
who has the curriculum nearby? it mentions that dual responsibilities are ok, I believe.
you report to two people, then essentially two people can influence your work and fire you if they don’t like your work. given its compliance and it should be independent from operations. this was my logic in picking not cool. but who knows
BLOU23 Wrote: ------------------------------------------------------- > who has the curriculum nearby? it mentions that > dual responsibilities are ok, I believe. Really? where??
I think the issue of dual reporting is a trap. I think the issue lies in can a compliance officer report to a CIO. We already know he can report to CEO and board.
yeah, existing employee can also be the compliance officer—but that’s not the question. can they report to CEO and CIO in a dual role.
It’s ambiguous though what that means though KRochilli. If an existing employee currently reports to the CIO and he then becomes the compliance officer can’t he still report to the CIO during the transition for his activities under his old role? In the longer term he should just be reporting the CEO.
KRochelli Wrote: ------------------------------------------------------- > yeah, existing employee can also be the compliance > officer—but that’s not the question. can they > report to CEO and CIO in a dual role. If your compliance officer is also your Tek guy, why not?
I haven’t reviewed the material, but I think that the compliance officer can only report to the CEO and/or the Board of Directors.
Maybe it was in one of their explanations to the practice questions. They asked this stupid reporting question once in the questions after the AMC code. All it says in the Code is that “Where possible, the compliance officer should be independent from the investments and operations personnel and should report directly to the CEO or the board of directors.” Who knows. In real life, a transition like that would be okay. This is a dumb question in my opinion, but what else is new. I could think of a lot of other compliance related topics in the AMC that are more relevant for candidates to know other than who the CCO reports to.
Yeah it was in the mock or sample if I remember right. Cannot report to an investment personnel but can report to ceo.
mark@dirtbags Wrote: ------------------------------------------------------- > KRochelli Wrote: > -------------------------------------------------- > ----- > > yeah, existing employee can also be the > compliance > > officer—but that’s not the question. can > they > > report to CEO and CIO in a dual role. > > > If your compliance officer is also your Tek guy, > why not? your tech guy does not report to the CIO.
KRochelli Wrote: ------------------------------------------------------- > mark@dirtbags Wrote: > -------------------------------------------------- > ----- > > KRochelli Wrote: > > > -------------------------------------------------- > > > ----- > > > yeah, existing employee can also be the > > compliance > > > officer—but that’s not the question. can > > they > > > report to CEO and CIO in a dual role. > > > > > > If your compliance officer is also your Tek > guy, > > why not? > > > your tech guy does not report to the CIO. Okay, replace with CFO. Teck guy report to CFO for Teck issues, then reports to the CEO for compliance issues… Why can’t that fly?
You can report to the CIO - so I put wrong.
i remember seeing something distinctly about the operations manager thing in the book. it seemed like the easy one to exclude but was actually the correct answer