Regulatory Compliance Basics Flashcards
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Read the first 7 Regulatory Compliance Basics flashcards as text
What is the purpose of a 'compliance hotline' or ethics hotline in an organization?
Answer: To allow employees to anonymously report suspected violations of laws or company policies
A compliance hotline provides a confidential channel for employees to report unethical behavior, policy violations, or illegal activity without fear of retaliation.
Under the Fair Labor Standards Act (FLSA), what is the federal minimum wage as established by the act's framework?
Answer: $7.25 per hour
The federal minimum wage under the FLSA is $7.25 per hour, though individual states may set higher minimum wages.
What does 'sanctions compliance' involve for businesses?
Answer: Ensuring the business does not conduct prohibited transactions with sanctioned countries, entities, or individuals
Sanctions compliance requires businesses to screen transactions and counterparties against lists maintained by agencies like OFAC to avoid prohibited dealings.
What is a 'consent decree' in a regulatory compliance context?
Answer: A court-approved agreement where a company agrees to take specific actions to remedy violations without admitting guilt
A consent decree is a legally binding agreement, approved by a court, in which a party agrees to cease certain activities or take corrective action to settle regulatory charges.
Which principle underlies the concept of 'proportionality' in regulatory enforcement?
Answer: Enforcement actions and penalties should be scaled to the severity and nature of the violation
Proportionality in enforcement means that the response to a violation should be commensurate with its seriousness, impact, and the violator's culpability.
What is the role of a Chief Compliance Officer (CCO)?
Answer: To oversee and manage the organization's compliance program and ensure adherence to regulations
A CCO is responsible for developing, implementing, and overseeing the organization's compliance program to ensure it operates within legal and regulatory requirements.
What is 'regulatory arbitrage'?
Answer: The practice of exploiting differences in regulations between jurisdictions to gain a competitive advantage
Regulatory arbitrage occurs when companies structure operations to take advantage of more favorable regulatory environments in different jurisdictions.