Compliance risk in the evolution of the investment services - characteristics, control tools and organizational issues

This research has looked at the present state and the progressive scenario of how banks and investment companies have put compliance into practice. It is the first time that in an empirical investigation, the subject of compliance risk focuses on the advancement of investment services, as defined by the Directive 2004/39/CE: 1) reception and transmission of order in relation of one or more financial instruments; 2) execution of orders on behalf of clients; 3) dealing on own account; 4) portfolio management; 5) investment advice; 6) underwriting of financial instruments and or placing of financial instruments on a firm commitment basis; 7) placing of financial instruments without a firm commitment basis; 8) operation of Multilateral Trading Facilities. Thirty-five financial firms took part in this investigation which was carried out in banks and investment companies. Due to the large number and variety of the sample, it was possible to differentiate the results using a double set of criteria: 1) Financial intermediaries (FI) frequently working either internationally or domestically; 2) Intermediary typology, this is to say banks or other financial intermediaries (asset management companies and investment companies). The significance of the available data makes it possible to foresee a continuity to the research in the future so that operators can have an instrument of periodic observation into the matter.