BISYS has hired two compliance and regulatory industry veterans, Frank Pavlak and Frederick Schmidt, to serve as chief compliance officers (CCOs) for BISYS’s mutual fund clients using the company’s recently launched ComplianceEDGE program.
BISYS says that the CCO role is an important component of its ComplianceEDGE program, an offering that provides its mutual fund clients with policies, procedures, testing, reporting, and recordkeeping required for compliance with the new SEC Rule 38a-1 which takes effect October 5, 2004.
Frank Pavlak and Fred Schmidt each join BISYS with an impressive resume of credentials garnered from blue chip asset management firms and regulatory agencies.
Pavlak has more than 23 years’ experience in the private and public sectors of the financial services industry. Prior to joining BISYS, he served as chief compliance officer for Oppenheimer Funds, Inc., where he had broad regulatory compliance responsibilities for all of Oppenheimer’s business lines. Previously, he worked 18 years for the Securities and Exchange Commission, serving as branch chief of its Denver, Colo. office; and as an auditor with the U.S. General Accounting Office in Washington, D.C.
He holds a B.S. degree in accounting from the University of Northern Colorado; and is an active member of several professional organizations, including the National Society of Compliance Professionals, the Investment Company Institute’s Compliance Advisory Committee, and the Ethics Officer Association.
Fred Schmidt, a 25-year financial services industry veteran, joins BISYS after establishing and managing a compliance advisory company that provided regulatory and operational consulting services to investment management companies. Previously he held a number of positions with Credit Agricole Indosuez during a 15-year period, rising to vice president and serving as chief financial officer and assistant secretary of proprietary mutual funds and related asset management subsidiaries of Credit Agricole Asset Management, U.S. In this role, Mr. Schmidt was responsible for overseeing compliance issues related to the company’s family of offshore and domestic closed and open-end mutual funds. He also held senior positions with The Fuji Bank & Trust Company and Manufacturers Hanover Trust Company after beginning his career at National Westminster Banking Corporation. He holds a B.S. degree in marketing and management from Fordham University, and a MBA in finance from Long Island University. He has been an active member of the Investment Company Institute’s Closed-End Fund, Risk Management, and Small Funds Committees.
According to Fred Naddaff, president of BISYS Fund Services, “Our ComplianceEDGE program, which we launched in April 2004, has been contracted by 12 existing clients, with nine of these contracts including the CCO component. Both of these highly qualified CCOs exemplify the stature of compliance professionals we are providing to our clients as part of this unique service offering. In an environment where increased regulatory oversight has become necessary to protect the interests of mutual fund shareholders, mutual fund executives are establishing the tightest possible compliance policies and procedures. That is exactly what compliance professionals such as Fred and Frank, supported by BISYS’ more than 70 compliance professionals and the power of our ComplianceEDGE program, provide. We expect the demand for this new compliance program to continue to grow among our existing and prospective clients.”
BISYS’ ComplianceEDGE program is strategically designed to assist fund companies in establishing a culture of compliance throughout their service organizations, and to facilitate mandatory compliance with the federal securities law established by the new SEC Rule 38a-1 of the Investment Company Act of 1940. Initial and ongoing compliance with Rule 38a-1 requires investment companies to develop, implement, and maintain comprehensive compliance programs, including written policies and procedures that address compliance with applicable federal securities laws by their funds and their service providers. Rule 38a-1 also requires fund Boards to designate a chief compliance officer (CCO) that reports directly to the Board and is responsible for the implementation and maintenance of compliance programs. Fund CCOs also must conduct annual reviews of their compliance programs and present the results to fund Boards.
Lisa Hurley, executive vice president and general counsel of BISYS Fund Services, said, “BISYS is strategically positioned as a leading provider of compliance services for the mutual fund industry based on our expertise and extensive experience providing a system of checks and balances that augments our clients’ compliance procedures and resources. We believe the demand for our new ComplianceEDGE program demonstrates the importance our clients and prospects are placing on the SEC’s mandate to establish a culture of compliance by October fifth of this year. We also believe augmenting our compliance team with these two extremely qualified compliance professionals will enhance the effectiveness and tangible benefits of this comprehensive compliance solution.”
BISYS expects to hire additional CCOs to support anticipated client demand for its ComplianceEDGE program.
ComplianceEDGE services can be tailored to address each client’s specific requirements. Although the chief compliance officer role is an important part of the ComplianceEDGE offering, BISYS’ clients have the option to subscribe to the CCO service or use their internal resources for this function. Other service options include the provision of ongoing, independent reviews from BISYS Regulatory Services.