The New York Comptroller’s Bureau of Asset Management recently announced that it is in the process of implementing sweeping compliance, ethics, and audit reforms to the way in which it oversees the assets of the five city pension funds.
These reforms will “significantly enhance accountability, transparency, and ethics in my office,” Comptroller Scott Stringer said in a speech delivered to the Citizens Budget Commission on Jan. 30. “My plan codifies critical aspects of risk, compliance and governance that will set a high standard for how we do business.”
Stringer’s six-point plan is designed to address potential conflicts of interest, strengthen internal controls and governance, and increase the transparency and efficiency of the Bureau of Asset Management’s (BAM) operations.
As part of this reform plan, Stringer said he will:
Dramatically reform policies and procedures governing BAM by appointing senior risk and compliance officers, who will report to Stringer, to strengthen, monitor, and continually improve operations;
Appoint an internal auditor and an internal audit committee to ensure that these reforms operate effectively, both of which will report to Stringer.
Implement cutting-edge training on ethics, conflicts of interest, and financial regulation with a focus on manager compliance with foreign asset control regulations, anti-money laundering protocols, and awareness of the Foreign Corrupt Practices Act;
Offer a resolution to fellow trustees on all five pension boards to ban placement agents across all asset classes;
Enact an investment disclosure policy that requires employees with investment decision-making authority to regularly report their personal trading to the senior compliance manager; and
Develop an enhanced internal process for reviewing disability payments.
Stringer designated Kathryn Diaz, adviser to the Comptroller on all legal issues, to implement the reforms with the assistance of the deputy comptrollers. Diaz formerly served as special counsel to New York State Department of Financial Services Superintendent Benjamin Lawsky, and as senior trial counsel at the state Attorney General’s office.