I know that you’re allowed to designate a current employee as the compiance officer if qualified but in what case does that impede in their independence? For instance Mock PM #2, question #6, says that when they hired a portfolio manager to become compliance officer it didn’t comply because of a lack of independence.
The compliance officer can’t report to someone that he is monitoring and should report to the ceo and or board. You can’t monitor someone effectively if they can fire your ass.
The compliance officer must report to the head trader if and only if the head traders compensatoin is tied directly to trading performance in order to allow the head trader to bully the compliance officer so he can make $$$. if both individuals are rational economic agents, they will collude and split the profits between themselves despite it not being a long-run maximizing decision for the firm
I think that he was still keeping his job as port mgr and became compliable officer in addition. I believe if he changed positions and was just compliance officer it wild have been okay