The board of governors of the Investment Dealers Association has passed its proposed by-law requiring that top executives take ultimate responsibility for their firm’s actions.

The bylaw requires that the CEO, president, COO, CFO or other officer of a member firm with similar responsibility or decision-making authority be named as the Ultimate Designated Person.

It also requires the designation of a chief compliance officer, who may but need not be the UDP.

In the past, the person called the UDP has had specific responsibilities for account opening and supervision. In many firms these functions will now not be performed by the newly-defined UDP, so the designated person will no longer be referred to as the UDP.

Other by-laws and regulations, both current and proposed, require designation of specific partners, directors, officers or branch managers to perform or oversee specific compliance activities.

Member firms must maintain accessible records of the designation of everyone with designated responsibility for ensuring compliance with specific by-laws and regulations for seven years.

In order to give members time to consider their compliance structures, make necessary registration changes and prepare and file the compliance governance documents, the new by-law will become effective on October 31. Members are required to have completed any registration changes and filed their governance document by that date.