The “message” behind the SEC’s Division of Trading and Markets’ recent guidance on supervisory liability is that the agency will not target compliance officers as the “guarantors” of their firms’ compliance.

The Division views compliance officers, typically, as having a more advisory consultative role and only when compliance personnel move out of that role and take on supervisory functions or get involved directly in business decisions rather than making recommendations will there be issues.  The guidance did not draw a “bright line” between the compliance and supervisory functions since it is “hard to draw absolute lines” when it is based on the facts and circumstances of a matter.

This area will be carefully followed to see where the SEC moves.