Solutions / Fractional CCO
Compliance leadership. On demand.
A fractional CCO for a few hours a month, or an entire compliance function: the roles a regulator expects to meet, filled by people who have held them, for exactly as much time as you need.
Who it’s for
For firms that need the role, not the headcount.
- A licensed or soon-to-be-licensed business that must name a CCO, MLRO or BSA officer and wants someone the regulator will take seriously.
- A growing firm whose compliance work has outgrown one person but does not yet justify a department.
- A firm between compliance officers, facing an exam, a remediation or a launch, that needs senior cover now.
What you get
From one expert to an entire compliance function.
A named officer
Your fractional Chief Compliance Officer, MLRO or BSA officer: accountable, reachable, and prepared to stand in front of your board and your regulator.
The program, run day to day
Policies kept current, monitoring performed, issues tracked, training delivered, reports written.
Board and regulator reporting
The reporting pack, the committee papers and the regulator correspondence, drafted and defended.
Exam and audit support
Document requests answered, interviews prepared, findings remediated.
A bench behind the officer
Specialists in sanctions, testing, regulatory change and compliance technology when a question goes beyond one person.
Options
Choose what you need.
Roles, time and shape are chosen separately, so the arrangement fits the business rather than the other way round.
Roles
- Global CCO
- U.S. CCO
- BSA / AML Officer
- MLRO
- Deputy CCO
- Sanctions Officer
- Compliance Testing Lead
- Regulatory Change Lead
- Compliance Technology SME
- Compliance Analyst
- Project or remediation team
Time
- 5 hours a month
- 10 hours a month
- 1 day a week
- 2–3 days a week
- Interim full-time
- Project-based
Shape
- Essential: one named officer, monthly cadence
- Executive: officer plus board and regulator reporting
- Embedded: officer plus specialists inside your operating rhythm
- Full Function: the compliance department, provided
Choosing a shape
Which arrangement fits.
A fractional compliance officer can be one named person on a monthly cadence or an entire department. The shapes above, matched to the situation each one suits.
Essential
You must name a compliance officer, the program is small and stable, and the work fits a monthly cadence. One named officer, monthly.
Executive
Your board, investors or regulator expect formal reporting: committee papers, a board report, regulator correspondence. The officer, plus that reporting.
Embedded
The work has outgrown one person. Monitoring, testing, sanctions or regulatory change need specialists inside your operating rhythm. The officer, plus those specialists.
Full Function
There is no compliance department yet, or the one you have must be rebuilt. The department, provided.
Interim full-time
Your officer has left, or an exam or a remediation will not wait for a hire. An interim full-time officer.
Fractional CCO
What a fractional Chief Compliance Officer does.
A fractional CCO holds the Chief Compliance Officer role for your firm on a part-time, contracted basis: named where the regulator requires it, accountable to your board, working the hours the program needs.
Holds the role
Named as your compliance officer where the regime requires a named person, with the authority and the time to be accountable for the program.
Runs the program
Policies, monitoring, training, issue tracking and the compliance calendar, kept current and evidenced.
Reports to the board
The compliance report, the committee papers and the plain answer to the question the board should be asking.
Faces the regulator
Correspondence, examinations and requests for information handled by someone who has sat on the other side of the table.
Accountability
What stays with your firm.
A fractional officer holds the role. The firm still owns the program, and some duties sit with the firm by rule.
The program itself
Under Advisers Act rule 206(4)-7, an SEC-registered adviser must adopt and implement written compliance policies and procedures, and designate a chief compliance officer to administer them. The obligation is the adviser’s, whoever holds the role. Source: 17 CFR 275.206(4)-7, https://www.ecfr.gov/current/title-17/chapter-II/part-275/section-275.206(4)-7
The annual review
The same rule requires the adviser to review, at least annually, the adequacy of its policies and procedures and the effectiveness of their implementation. The officer usually runs the review. The firm owns the result. Source: 17 CFR 275.206(4)-7(b), https://www.ecfr.gov/current/title-17/chapter-II/part-275/section-275.206(4)-7
Authority and resources
In the 2003 release adopting the rule, the SEC said a CCO should be “empowered with full responsibility and authority to develop and enforce appropriate policies and procedures for the firm.” That is the Commission’s stated expectation in the release, not rule text. Giving the officer that authority, and the time and budget to use it, is the firm’s decision. Source: Compliance Programs of Investment Companies and Investment Advisers, Release IA-2204 (December 17, 2003), https://www.sec.gov/rules-regulations/2003/12/compliance-programs-investment-companies-investment-advisers
Certifications and approvals
At a FINRA member, the chief executive certifies each year that the firm has processes to establish, maintain, review, test and modify its written compliance policies and supervisory procedures, and that the chief executive has met the chief compliance officer to discuss them. Source: FINRA Rule 3130, https://www.finra.org/rules-guidance/rulebooks/finra-rules/3130. At a bank, the board of directors approves the anti-money laundering program. Source: 31 CFR 1020.210, https://www.ecfr.gov/current/title-31/subtitle-B/chapter-X/part-1020/subpart-B/section-1020.210. Those signatures stay with the firm.
Risk decisions
Accepting a risk, funding a remediation or changing the business to remove a risk are decisions for management and the board. The officer puts each one in front of them.
Monthly report
What a monthly report covers.
An illustrative contents page, not a client document. The order and depth follow your regime and the shape you choose.
Open issues
Each open issue with its owner, its due date and what changed since the last report.
Monitoring and testing
What was reviewed this month, what it showed and what was escalated.
Regulatory change
New rules, guidance and enforcement actions that touch the business, and whether each one applies.
Training and attestations
Who completed what, and who is overdue.
Decisions needed
The questions only management or the board can answer.
The next two months
Filings, renewals, the annual review and any examination or audit dates coming up.
How it runs
How it starts.
Scope
A conversation about your licences, your risks and the role you need filled. We propose the person and the shape.
Onboard
The officer takes the file: policies, registers, open issues, regulator history. Two weeks, typically, to be able to answer for the program.
Run
The cadence you chose, with a monthly written report to management and an escalation route that does not wait for the next scheduled day.
Adjust
Hours and roles change as the business does; a launch or an exam can bring the bench in for a season.
Questions
Asked before, answered plainly.
- What is a fractional CCO?
- A fractional CCO is a qualified Chief Compliance Officer who holds the role for your firm part-time, under contract: named to the regulator where required, accountable to your board, and working the hours the program needs rather than a full-time salary. Taft’s fractional CCOs are former compliance officers and regulators.
- How is a fractional Chief Compliance Officer different from outsourced compliance?
- Outsourcing hands tasks to a vendor. A fractional CCO holds the role: the person is named, attends the board, signs the reports and answers the regulator, with Taft’s bench behind them for the work that goes beyond one person.
- Will the regulator accept a fractional officer?
- In many regimes, yes, provided the person is qualified, genuinely accountable and given the time and authority to do the job. Part of scoping is confirming what your regulator expects and structuring the role to meet it.
- Who is the officer?
- A named Taft professional with prior experience in the role, introduced to you before any engagement begins. You meet the person, not a team logo.
- What if we need more than we scoped?
- The shape flexes. Scope often changes over a year as launches, exams and growth come and go.
- Is a fractional compliance officer the same as a fractional CCO?
- A fractional CCO is one kind. Fractional compliance officer is the broader term for the roles on this page, including a chief compliance officer, a BSA/AML officer and an MLRO. Each regime names the role differently and sets its own expectations for it.
- What stays with our board?
- The program and the decisions about it. The firm adopts the policies, owns the annual review, gives the officer authority and resources, and makes the risk decisions the officer escalates. Certifications and approvals that a rule assigns to the chief executive or the board stay with them.
Fractional officers act within the authority your governance gives them and are accountable to your board. Taft does not provide legal advice.