# Compliance

*Professional & Ethics — Finicade finance glossary*

Compliance is the function responsible for ensuring a firm follows the rules that apply to it — writing policies, monitoring, training, and reporting breaches. As a second-line function it should advise the business and challenge it, an inherent tension since it is paid by the people it polices. Its authority is usually judged by one test: whether it can stop a profitable trade, and whether it ever has.

**Also known as:** compliance function, compliance officer

**Related terms:** [Internal Controls](https://finicade.com/glossary/internal-controls), [Three Lines of Defense](https://finicade.com/glossary/three-lines-of-defense), [SEC](https://finicade.com/glossary/sec), [Conflict of Interest](https://finicade.com/glossary/conflict-of-interest), [Audit](https://finicade.com/glossary/audit)

Source: https://finicade.com/glossary/compliance