2005 has been a good year for people looking for a job in investment banking compliance in London and New York. 2006 could be even better, especially if you happen to be a compliance specialist in continental Europe.
"This has been one of the busiest years ever for compliance hiring," says Chris Hickey, head of the compliance and legal team at City of London recruiter Robert Walters. "And the conversations we're having with hiring managers suggest next year could be just as busy."
UK and US: Hedge funds behind the surge
The sector has been flavour of the month for several years in the UK and US. In both countries, hedge funds are upping the hiring tempo.
Lindsay Reid, principal consultant at recruiter the PSD Group in London, says the Financial Services Authority's new hedge fund supervisory team is prompting hedge funds to hire in the UK. He says hedge funds are looking for compliance specialists who are both technically strong and flexible in their approach: "If something is a definite no, you'll need to be able to justify it and come up with some alternatives."
Mary O'Gorman, managing director of New York City-based Snelling Search, says the February 1st deadline for hedge funds with more than $30m in assets to register with the SEC is prompting a spate of compliance hiring in the US. Hedge funds are fussy, says Snelling: they want the best and they're prepared to pay compliance professionals up to 40% more than standard mutuals.
Europe and regulation: A healthy hiring mix
Lurking behind banks' urge to add specialists in observing rules and regulations is the fact that rules and regulations have become a lot more plentiful. Hickey highlights the Markets in Financial Services Directive (MiFID) and the Market Abuse Directive (MAD). MiFID is set to be enforced across Europe from April 2007. The MAD rules should have been implemented in European Union member states by October 2004 but were widely deferred, prompting the European Commission last August to threaten recalcitrant governments with legal action.
In Italy and France, compliance recruiters say the area is only now becoming a priority. "Compliance teams are very small in Italy, but this is changing," says Giorgio Veronelli, executive manager at Michael Page in Milan. "International banks in Italy started to hire compliance officers in 2005, and next year Italian banks will add staff too."
Local regulators are contributing to the continental appetite for compliance hires. Frederic Bosco, a recruiter at Paris-based recruitment firm Cabinet MacAllister, says French regulator, L'Autorité des Marchés Financiers, has become more stringent at applying rules. "Compliance hiring is only just beginning in France," he says. "It will be a critical issue in 2006."
German regulator BaFin issued new derivatives regulations (Derivate-Verordnung) in early 2004, a move which Anke Braun at specialist compliance recruiter MRL Financial says has encouraged hiring in Frankfurt. But she says Eastern Europe and the Middle East are the real source of action when it comes to compliance hiring. Deutsche Bank, for example, has recently hired a head of compliance recruitment in Russia, and MRL is opening a new office in Dubai to capitalize on hiring driven by the new Dubai International Financial Centre.