Compliance culture gaps persist at corporate finance firms
The Financial Conduct Authority surveyed 411 corporate finance firms on their compliance resources, receiving 382 responses. Most firms conduct core compliance activities, but gaps persist in practices that build a genuine compliance culture, such as whistleblowing arrangements and breach registers.
No single blueprint, one shared principle
The Financial Conduct Authority surveyed 411 corporate finance firms about their compliance functions, receiving 382 responses.
Most firms were small: 64 percent employed nine or fewer staff and 89 percent had fewer than 50 employees.
Yet 63 percent reported a compliance function that is not dedicated solely to compliance and carries other business responsibilities, a structure that can create conflicts of interest when compliance also generates revenue.
Thirty-two firms act as AIM nominated advisers, AQSE corporate advisers or brokers, or listing sponsors, roles the FCA said require strong and credible challenge to protect market integrity and investor confidence.
Compliance arrangements should be proportionate to a firm's risks, the FCA noted, but proportionate only when they still deliver high standards of conduct and effective conflict management.
Outsourced advice, not outsourced responsibility
Ninety percent of respondents used some form of third-party compliance support.
The FCA said external expertise can be valuable, especially for smaller firms, but regulatory responsibility remains with the relevant senior management function holder.
Firms must stay actively involved, understand the advice they receive and maintain effective oversight.
The survey found 47 percent of firms carried out every activity covered, while wider gaps clustered in culture-building practices: 140 firms do not include compliance in staff performance assessments, 90 lack whistleblower disclosure arrangements and 82 have no breach register.
Checklists are not culture
The survey confirms that compliance in corporate finance firms is often a checklist, not a culture.
Gaps in whistleblowing arrangements and performance assessments signal weak accountability, not just missing paperwork.
Without genuine authority, compliance functions risk becoming formalities rather than real safeguards.