Compliance careers in the FX and binary options sector and key skills required to succeed – Comprehensive inside view

During the course of 2016, the demand for compliance professionals in the electronic trading industry which cover retail brokerages, liquidity providers, prime services and interbank dealers, became so unaligned with the supply of such experienced personnel, that day rates in London increased by 25% to a remarkable £1200 per day.

Indeed, compliance and regulatory expertise are two aspects within this highly complex business that have had to evolve to be able to take into account a range of structural factors such as the technologically advanced trading infrastructure that is require by EMIR and the Dodd-Frank Act, depending on which side of the Atlantic a company is based, and the reporting and responsible duties required by companies these days.

Today, technology and compliance are very much part of the same sentence in all companies. Alexandros Constantinou, MCSI, Head of Compliance & Regulatory Research at MAP S Platis explains what is require to succeed in a career in regulation and compliance in the online trading industry.

In today’s financial services sector, including FX and Binary brokers, businesses are largely driven and affected by developments in the regulatory landscape. MAP S.Platis, a full service consultancy group in the field of regulatory compliance, provides below an overview of the regulatory compliance role and how potential candidates can attain the skills required for a promising career in compliance.

Following the global financial crisis of 2007-08, regulators across the world and especially G20 countries have placed significant emphasis in the development of detailed rules which aim, among others, to increase operational and market transparency, enhance investor protection as well as decrease systemic and operational risk.

Coupled with tightened AML rules and scrutiny, the aforementioned developments have emphasised further the importance of the compliance function, and subsequently growing into a prominent role in today’s financial services sector.

Another reason for the advancement of the compliance function is heightened supervision and enforcement by authorities across the world. Hefty fines, especially for banks and other financial institutions, underpin the need for companies to establish new units for preventive law, accelerating a hiring spree of regulatory compliance specialists.

In fact, the compliance function is now so integrated and embedded in the daily operations of financial institutions, that in almost all occasions of their daily activities, developments cannot occur without the prior review and approval of compliance specialists. For example, marketing campaigns, acquisition of new clients, issuance of new products and changes in the terms of business with clients, all require the pre-approval of the compliance function before implementation.

The hiring spree of compliance specialists is not only applicable to financial services. The importance of compliance as a state of aligning with established guidelines or specifications is also evident in other industries; for example, in software development or data storage, regulations and other guidelines are increasingly becoming status quo in the IT sector.

Particularly FX and Binary brokers, which are under heightened scrutiny, are facing greater regulatory demands. Industry-specific rules such as call monitoring, KYC, advertising limitations, trading platform specifications, website content, leverage rules and more, create a need for FX and Binary brokers to establish dedicated compliance roles to protect the organisation from reputational damage and costly penalties.

There is a war for talent in the compliance space and the outlook seems very bright for anyone interested to embark on a career in regulatory compliance. It is indeed difficult for many financial services firms to find good and experienced compliance officers, owing to the increased demand combined with scarcity of such skills. Adding to the lack of talent is the fact that being a relatively young field of expertise, it is not offered as part of the syllabuses of many academic institutions or professional qualifications.

MAP S.Platis and the European Institute of Management and Finance (EIMF), have identified this gap and are addressing it with specific courses aimed at equipping people in the field of regulatory compliance. The CISI Global Financial Compliance Certificate addresses techniques used to implement a successful compliance function in a firm.

It provides a comprehensive introduction to all the issues a global Compliance Officer may encounter. The Certified Anti-Money Laundering Specialist (CAMS) credential is the gold standard in AML certifications and recognised internationally by financial institutions, governments and regulators.

The principal responsibility of a compliance officer is to ensure that best practice, as indicated by the legal framework, is consistently applied by a financial institution and that the rules are being followed and implemented as set by regulations.

In the past, compliance officers mostly dealt with issues such as disclosure or providing required information to auditors. Compliance now encompasses so much more activities in the field.

For example, compliance may include ongoing monitoring and scrutinising specific behaviours that might indicate fraudulent activity, reviewing complex financial products and transactions or identifying financial proceeds of illegal activities as anti-money laundering officers or even pre-clearing research reports.

There is also a prominent career in compliance as external advisors for FX and other financial services firms. Irrespective of having an in-house compliance specialist, every FX company should work or partner up with a specialised external compliance advisor.

External compliance advisors perform an integral role, as they provide highly specialised technical support in compliance, provide a wider range of expertise and support, are able to understand better particular business needs and translate these into practical advice and action plans for internal compliance departments.

They are also able to bridge the gap between law and practice, identify and find solutions to problems and provide full management support in relation to all compliance activities, such as communicating with regulators, drafting reports as well as keep companies up-to-date with regulatory developments and new requirements.

For those that are interested in a career in compliance, experience is not always necessary. Demand for junior and senior compliance officers, means that companies are looking to fill these positions with candidates from diverse backgrounds. Since there is no specific educational criteria set for compliance, candidates from backgrounds such as economics, management, finance, law, accounting, mathematics and risk management can be valuable and can perform quite well.

Compliance work is challenging and there is a set of essential criteria and skills in order for someone to succeed in the field. Particularly, for external compliance advisors, not only one needs to be accurate and detailed with the ability to analyse situations and data, but also needs to show high level of integrity to ensure that companies adhere to regulations. Sound knowledge of the regulatory framework or legal background is highly valued, but one needs to be proactive and be up to date with upcoming and recent regulations.

A compliance specialist also needs to possess the necessary license and qualifications from the local regulator, such as CySEC exams and other equivalent professional qualifications. In addition, strong communication and interpersonal skills can help with understanding client needs, but also developing a long-term relationship with the regulator. One also needs to have strong problem solving skills and be able to proactively find answers to difficult situations with minimal supervision.

Last but not least, a passion for compliance and for continuous learning and development is a prerequisite for a promising career in the field; and with the right help, the toolset for this career can be acquired more easily than before.