This is a transcript of the podcast episode NSCP recap with Barbara Boehler between GRIP Senior Reporter Carmen Cracknell, US content manager Julie DiMauro and Barbara Boehler of Fordham Law School.
[INTRO]
Carmen Cracknell: So great to meet you, Barbara. We are here today to talk about last week’s NSCP conference and we’ll explain what that is in a bit. But first, could you just introduce yourself and talk a bit about your background for us?
Barbara Boehler: Yes, Barbara Boehler. I’m the senior director of the Program on Corporate Ethics and Compliance at Fordham Law School. We offer a master’s in studies in law and an LLM focused in corporate compliance for students either online or in person. And my background is financial services compliance. So going on 20 years or so of financial services compliance, predominantly broker dealer.
Carmen Cracknell: And Julie, we know you well, but can you please reintroduce yourself for any listeners who don’t know who you are?
Julie DiMauro: Thanks, Carmen. So I am the US content manager for Global Relay Intelligence and Practice, or GRIP as we know it, and call it. And I’ve known Barbara for a while. We worked together at Fidelity Investments in Boston in their compliance department. And I also know her currently through my adjunct teaching at Fordham Law School. So very pleased that she’s here. Thank you, Barbara.
Carmen Cracknell: So this event, which for anyone who doesn’t know, NSCP is the National Society of Compliance Professionals. It’s a US organization. They have a yearly conference. It was last week in Texas. Barbara, as you’re a board member there, can you just talk a bit about what the event is all about and what it’s for?
Barbara Boehler: Yes, absolutely. So National Society for Compliance Professionals is a nonprofit. It is focused on investment advisor and broker dealer compliance officers, although we have to go a little bit more broadly in financial services for private funds and other sort of financial services compliance officers. We are meant, or the motto of the organization is for compliance by compliance. And the event is annual. I have to say this was our biggest ever event. I’m also co-chair of the conferences committee. So we had 951 attendees at this event. It is three days of really information that we hope is useful and practical. Best practices, you know, from the perspective of the in-house compliance officer.
Carmen Cracknell: And Julie, were you there to represent Global Relay or to build more expertise or both?
Julie DiMauro: Yeah, a few reasons. So I went there, you know, definitely to absorb some new information on chat to attendees about how rulemaking is affecting them and their businesses. But also, you know, to go over to our booth and hear people specifically talk about what we do as a tech company. So I’ve got a few different perspectives, which was great.
Carmen Cracknell: Awesome. And Barbara, it sounds like quite a big conference. What kind of people attend? Is it mainly compliance professionals? Is it people trying to sell their services? What would you say is the biggest sort of group of people there?
Barbara Boehler: The topics are designed for compliance officers specifically. Certainly, we do have a lot of sponsors and vendors who attend. The conferences committee is all in-house compliance officers, you know, as well as law firms and some people who are in advisory firms or for vendors, but all, you know, focused on, you know, the needs of the financial services compliance professional. It’s a very, you know, I think regulatory specific kind of a conference, if that makes sense. So we definitely go in the weeds on particular topics interesting to our members. And we spend a lot of time, really over almost a year. Actually, the conferences committee pretty much starts up after the end of the conference. So I think we’re going to be meeting for the first time within the next couple of weeks to start to talk about next year. As you know conference of this size is a lot to put together.
Carmen Cracknell: Yeah. And this is a question for you both. What did you think, Barbara, firstly, were the standout topics this year and maybe what was different this year from previous years?
Barbara Boehler: Well, different. It was the first time that we’ve ever been in Dallas for several years or that I can remember. For the last several years we’ve been in Washington, D.C. And it was bigger than it has ever been. And it also integrated the regulators in a way that we haven’t done before. So we had 350 some odd new attendees. We had 48 regulators other than speakers. We always have regulators who are speakers, but we haven’t before had regulators who have been part of the part of the audience for us. So that was a big difference. In terms of the hot topics for us. We were really trying to promote this feeling of or volunteer opportunities for the organization. So things like micro opportunities. So if you wanted to volunteer at the event, maybe leading a session or managing the session or running around the session with the mic even as well as longer term opportunities to engage, the organization is really, I mean, it takes that motto by compliance for compliance very seriously.
So you really, I don’t know if I’ve ever had a time when I’ve asked someone for assistance or help or an opinion where I haven’t gotten it. So it’s really a great opportunity to be able to engage with your peers and be able to ask a question that you may not necessarily need to go to general counsel or outside counsel rather for or just to discover what the best practice really is. Kind of, I guess, from the outside looking in, the biggest thing that happened at the conference was the announcement of the new SEC exam priorities, which were out months and months earlier than they normally are out. So that was for us a really big deal and exciting in the compliance community, really.
Carmen Cracknell: And Julie, what was the standout topic for you? I know you mentioned yesterday to me when we spoke the exam priorities and Mark Uyeda’s talk, was that the kind of standout talk for you?
Julie DiMauro: It was a wonderful discussion. That was definitely one of them. And so Mark Uyeda on day one and then they had four people from the SEC, four representatives from the exams department at the SEC leadership there talk about the exam priorities in more detail. And it was wonderful that they were able to leverage the fact that the exam priorities had just been published. It was fantastic timing, like Barbara said. It really cinched the conference, I think, in terms of relevancy and just importance. And the regulators were really, really, I felt very upfront, very interested in giving very concrete best practices and guidance to the audience. So they spent a lot of time on here are two risk alerts you need to read like now, you need to use them as training. If you missed them, here are a couple of rule amendments or deadlines for proposed rules that are coming up that you’re going to need to think about before you start thinking that the end of the year is coming in, you can just kind of relax, no there are a couple more. So it was very practical in that sense, going through and talking about the implications of some of the rulemaking when they’ve extended rulemaking to affect a broader swath of the industry, whereas maybe cybersecurity rule had just affected investment advisors. Now it’s going to affect broker dealers clearing houses exchanges. So they were very, very concrete and I think particular about their advice. And I thought that was extremely helpful. And then the conference itself talked and I said this to Barbara, just a little bit before this session is they get back to the marketing rule and a proposed rule, and they just kept talking about how your advertising is so important. So anything that you’re talking about, be free of conflicts of interest, untrue statements about yourself, your size, your staff, the qualifications of your staff, your services and products, your strategies. They’re still very concerned about those things. It’s just things that keep popping up in their exams that trouble them a little bit because they think that they’ve been so clear on this point and they want to just drive home the message one more time. We are going to catch you.
Please do what you say. Please have your marketing statements reflect reality. So that kept coming up. And then the last thing was that there was, of course, a focus on technology like artificial intelligence, et cetera, and the promise of it and the threats involved need for guardrails. So there were several sessions on that that I thought are really interesting.
Carmen Cracknell: Yeah, I guess AI is the hot topic at the moment. Julie, you said you went to the keynote panel on generative AI. Did you both go to that and could you speak a bit about that and what you learned from that?
Julie DiMauro: So what I thought was great was that they started from the premise that you might not know a lot about AI and that’s great because most of the audience was like, I’m interested in it, but I don’t necessarily delve into the weeds. So they said, you know, like a lot of what we use for technology, and if you read Hester Peirce’s dissent and the predictive analysis analytics proposed rulemaking, she dissented from that rulemaking because she said, you know, really anything could be called AI. I mean, you need a computer and you need data.
And it builds an algorithm for you over time, but it really could be anything from an Excel spreadsheet to a self-driving car to a chatbot. So it’s really a dependent, it runs the gamut in terms of sophistication. Generative AI is a subset of it, and that’s something that over time collects more and more data and develops and learns patterns from the data. That’s what we’re talking about when we talk about like open AI. And the speakers from Eversheds Sutherland, Safer, and Sethi Clarity advisors, they gave some interesting perspectives on, again, very promising technology here. There is a woman who is speaking, she was one of the presenters who’s legally blind, and if you saw her at the conference, she did have someone guiding her throughout the venue. She was a dynamic speaker, and she said to us, you know, I use AI constantly in my life. I, you know, miss my Alexa. So, you know, she brought home the message that, you know, although there are some definitely concerning aspects to AI, you have to understand that for people with disabilities or people who learn differently, or just, you know, generally speaking, for overworked offices, etc., that have, you know, so much to do, that the capacity of AI to streamline things in our lives or to benefit people’s lives is really there, and we should avail ourselves of it. So I thought that those were some interesting points. And then, you know, but again, they brought home the fact continuously that it has to be supplemented with human judgment and human context. And the gentleman from Safer brought up the fact that, you know, like a self-driving car will learn over time that, you know, like a ball in front of it means it has to stop and gradually come to a stop so as not to hurt the driver. But they might not know, like a person would know, that a kid could be following or a pet. And that’s your human judgment knowing that. So again, there’s no getting around the fact that a human adds a much needed aspect to AI and to the analysis of data in general. So overall, really good session. Anything you want to add, Barbara?
Barbara Boehler: No, I think that that’s great. And I think, you know, I think people have been really concerned with will AI take over jobs, you know, and so you kind of hear that echo through many of the sessions. And it seems, and actually not even only this event, but I’ve been hearing it a lot at different events. But what I’m hearing also is that what it can do is limited at the moment. And so maybe it is really something that can elevate what we do and take away those parts of the job that have been very repetitive and rote and that maybe it might be difficult to even staff because we don’t have people that actually want to do that kind of work, you know, and so it elevates this discipline and makes it so that really those, the quality of the work that we do, you know, is so much different. You know, we focus our time on examining and examining how it fits within our program rather than, you know, keeping up to date with the regulatory change, you know, by scraping the internet or something, you know, so I think it’s kind of a whole new world. I think you’re going to continue to see this topic in kind of peppered through all of our events, just because it is so impactful to the space and we’re just everyone’s trying to keep their arms around it. So it’ll continue to be, you know, a hot button issue for conferences to come.
Carmen Cracknell: Definitely. Yes, such a complex issue. Barbara, I know you attended quite a few other talks and obviously there was so many going on at the same time. You, I believe, went to one, a panel that discussed detecting and confronting unethical behavior. That’s a really big topic here in the UK with the crackdown on non-financial misconducts. I’d be interested to hear what’s going on in the US.
Barbara Boehler: Yeah, that was a particularly great session in my opinion. So we had a couple of our students at Fordham who were actually on panels. And so that panel included one of our MSL students, Masters in Studies and Law, Camille Howard. So it was wonderful to see her up on the stage, so to speak. It was a really great, you know, conversation about having, you know, difficult conversations in a firm, being able to work on strengthening your culture of compliance. And having a good sense of, you know, meeting your stakeholders kind of where they are, being approachable as compliance officers. So it was an excellent conversation, kind of a packed room, an engaged crowd, and certainly gives you an indication of how important those things which may sometimes seem like softer skills in a compliance program. It’s not necessarily as rules based but certainly bubbles through you’re entire program.
Carmen Cracknell: Was there any talk about best practices in compliance for effective compliance?
Barbara Boehler: Best practices from an ethics point of view?
Carmen Cracknell: Yeah, I think there was another talk, best practices for an effective global compliance program where some issues about the FCPA came up and they talked about Brazil and cooperation between global regulators.
Barbara Boehler: So this was another great panel. Again, I’m biased because another of our students was a panelist in this panel. So Claudia Massaia, who’s one of our LLM students, who is also a lawyer in Brazil, presented along with her co-panelists. And it was also very interesting, the focus on how best to sell into or to be careful so that you can preserve your right to sell potentially into these different markets. These events tend to be, as you would imagine, very US focused. So it’s good to have a broader sense of what’s going on in the compliance world, especially as your business people look to new markets to do business. It’s not as easy as just getting on a plane. In fact, they should never just get on a plane. They should always make sure that they talk to their compliance department before they start marketing in any new location.
Carmen Cracknell: Julie, did you attend that talk? Did you hear a lot about the more international context of compliance?
Julie DiMauro: I didn’t go to that one, unfortunately. And luckily, I’d seen some of the Fordham students and got to interact with them, but I didn’t get to that session. Apologies.
Carmen Cracknell: You did mention a talk you attended about the steps needed to protect chief compliance officers from liability. Can you talk a bit about that?
Julie DiMauro: Yes, definitely. So that came up in a number of sessions. So Commissioner Uyeda referred to it. It was brought up in a couple of other panels as well. But definitely, they wanted to just address the kind of lion in the room. It’s always on everybody’s mind. And the National Society for Compliance Professionals has issued a model framework that they have proposed to the SEC to use something to add greater clarity and give more certainty to compliance officers about what could land a compliance officer in trouble, right? And what could make them personally liable? What are the kind of elements that the SEC would be using? And to be more granular about it than the SEC has been. The New York City Bar Association has their own focus as well.
And they referenced those frameworks and said, listen, it is apparent that there needs to be more clarity in this area because compliance officers are definitely nervous about what could give rise to their personal accountability. But they also stressed that, please don’t operate under the assumption that there’s a target on your back. We do believe that, of course, the firm itself has the ultimate responsibility. And people such as the CEO and board obviously are getting paid a certain amount of money to carry a higher risk than you should.
Barbara Boehler: No, I think it’s funny. There was a New York City Bar compliance program just this week. And so the head of the enforcement division of the SEC spoke and said that paraphrasing being a compliance officer was not a get out of jail free card. But with that, you know, they’re not, they’re not to Julie’s point looking to paint a kind of target on the back of compliance officers. So I think it’s this is one of those evergreen topics that is always really popular at compliance conferences and should be because I think we need to be careful that we are not biting off more than we can chew, you know, at our firm or taking on more than we should in terms of, you know, supervisory liability. We shouldn’t be, you know, writing ourselves in as the owner and arbitrator of all of our compliance policies. We need to be able to share that with our our business people.
And I think that this panel, I was at this panel, too, was really good to kind of run through those frameworks. And the frameworks do seem like they’re getting some traction, which is a good sign and gives us a little bit of guidance in house about how to, you know, just some some some points to be careful of. And so and it all seems very common sense, but I think it’s all worth reminding, you know, folks that they should make sure that that they are also covered when they are they are in a firm.
I think that, you know, we we talked a little bit about maybe the importance of having insurance. You know, as a compliance officer, I think that that’s a good practice point. And I think that, you know, ultimately, compliance officers do need to be careful that they aren’t staying in a firm that maybe doesn’t dovetail in with their own personal personal ethics and, you know, doesn’t feel uncomfortable to them. You know, it’s ultimately their their name, you know, their livelihood, their ability to continue on to work in this space. And so I do think we have to be a little bit careful of this and especially those of us who have do have our bar licenses, you know, we we need to kind of comply with multiple regulatory regimes. So I think we need to be a little bit careful here. So it’s all very good practical advice.
Carmen Cracknell: Yeah, definitely. So moving on to a different sort of topic, really, what can compliance professionals do to keep abreast of regulation and all this new information that’s constantly coming at them in terms of training, maybe master’s programs, especially people who’ve switched from non-legal careers.
Barbara Boehler: So a good thing to do is if you are involved in kind of a niche area of compliance is to make sure you’re involved in the organizations that are focused on those areas. I think that that will give you a lot of comfort and a place to call to be able to share best practices. You can learn a tremendous amount, shameful plug for the National Society for Compliance Professionals, but it really is a good organization. And then if you are interested in maybe more formal education, it’s funny because when Julie and I started all of those years ago, there wasn’t really a formal sort of training program for compliance officers. I think probably I know I did and I’m not sure if you did. I don’t want to speak for you, Julie, but I know many of my peers sort of just fell into compliance. And it’s very nice to see that students now aren’t just falling into compliance, but are purposefully seeking out compliance educational opportunities. And so they’re not compliance nerds by accident, they’re compliance nerds by design. And so we do have a master’s in studies in law and corporate compliance.
And there are a number of these kinds of programs that have emerged over the last several years. And they kind of fit this need in the market, if you will, of students who maybe didn’t really have that terminal degree that fit really with what their career aspirations were. And so our students may have years of experience as a compliance officer, and now kind of want to circle back a little and obtain that degree. And so students are either coming to us with a lot of experience or coming to us kind of new in compliance, looking to get a bit further in their career, or looking to completely break into compliance from a different area. And so that makes for a very rich classroom experience. So you have students learning really from each other, you know, across various industries. The big concerns of compliance are the same. If you’re in financial services or you’re in pharma, you know, it’s, you know, it gets a little bit different as you kind of wade into the weeds, or if you will, of compliance regulation. But those big elements of that there be a compliance officer in a training program and policies and procedures and that you, you know, mitigate risk and examine risk, all of those elements of a compliance program are all very consistent.
Carmen Cracknell: Julie?
Julie DiMauro: Yeah, I know I’m a big fan of learning at conferences and learning from these, you know, opportunities that master’s programs that universities are offering. And the great thing about them too is that, you know, a lot of them are very user friendly. I mean, obviously, if you’re working and you have a very limited schedule on these programs, recognise that and you can take a lot of them remotely and do that at night.
And, you know, I believe that, you know, these institutions and the people that run them really get it in terms of the fact that, you know, people have are juggling a lot. So they try to make the schedule as, you know, conducive to, you know, a working adult schedule as possible.
So that’s a great thing. The other thing is that a lot of more and more of these programs are becoming a little bit more specialized. So if you do have an interest in cybersecurity or supply chain procurement, you can find a specialty area, you know, compliance program for you, which is great.
And then the other thing is that, you know, the students learn from each other. It’s amazing. So it’s not just sitting around in a classroom learning from some instructor. They are they have all different experiences. They come together and they inform each other and they give each other career leads. So it’s terrific. And a large number of them, as Barbara, will attest, stay in touch with each other and their instructors. And so I end up learning about their career trajectories and they use them for all the purposes that Barbara listed. And the only one I would add is to go from a small firm to a larger firm, which, right, you know, can be more money. So it’s a win-win and there are a lot of opportunities and I’m very proud to be involved with a couple of them.
Barbara Boehler: Compliance is about community, right? And so it’s important that you I mean, the people that you meet in the class and the people that, you know, are your instructors, the people that you meet at these events, I mean, they’re all people that you are going to leverage and not just for jobs, but for you know, they become kind of lifelong friends. And, you know, it’s just it’s it’s a tough probably not telling anyone anything new by saying that being a compliance officer can be a really tough job inside of a firm. So you do kind of need your you need your people kind of around you that sort of understand what that’s like and kind of can can give you some assistance as you’re kind of going through.
Carmen Cracknell: Great. Well, thank you both for coming on the GRIP podcast.
Barbara Boehler: Yes, no, that’s great. Thank you so much. I will say that NSCP will be back next year, also in Dallas. And so look for information about that. And then also we’re having them on campus in April. So they’ll be on campus for our spring labs event. So if you want to take a look at Fordham and join an NSCP event, we would love to see you there.
Julie DiMauro: Thanks everyone. I really appreciate all of your your time today. This is great.
