Regulatory compliance monitoring

Regulatory compliance monitoring is the ongoing work of checking two things: which published rules currently apply to an organization, and whether its activities actually comply with them. The first half tracks final rules, amended handbooks, guidance and enforcement actions as they appear. The second half is the compliance function's testing role, which the Basel Committee states plainly: "The compliance function should monitor and test compliance by performing sufficient and representative compliance testing" (BCBS 113, paragraph 40, April 2005).

Monitoring differs from regulatory horizon scanning in timing. Scanning follows proposals and consultations that do not bind anyone yet; monitoring starts when binding text is published or takes effect. It also differs from regulatory change management, which takes each applicable change and turns it into an assessed, owned and evidenced action. In practice the three feed one pipeline, and gaps tend to open at the handoffs between them.

UK rules express the same duty in general terms. FCA rule SYSC 6.1.1R requires a firm to "establish, implement and maintain adequate policies and procedures sufficient to ensure compliance" with its obligations under the regulatory system (FCA Handbook), which presupposes knowing what those obligations are as they change.

Good monitoring is defined by its scope and its records. The scope says which jurisdictions, regulators and topics are watched, and how often; a compliance monitoring plan usually holds it. The records show when each item was captured, what was decided and who decided it. A program that cannot show what it looked at and dismissed is hard to tell apart from one that missed the change.

For a comparison of the methods teams use, from regulator subscriptions to AI agents, see how compliance teams track regulatory changes.

This entry is general information, not legal advice.