Supervision of the internal controls and compliance arrangements of an operator of a CIS is important because evidence that an operator's business is well controlled and that it has its own internal supervisory arrangements, will provide some comfort that an operator's activities are compliant.

Senior management of the operator should take overall responsibility for compliance, including (where appropriate) requiring sufficient reporting of the results of compliance checks.

An operator may organize internal monitoring arrangements in a number of different ways. A compliance officer may be appointed who is responsible for ensuring an operator's business is conducted in accordance with relevant regulations. A monitoring programme may be developed which would entail periodic reviews of different functions internally, to confirm whether the business is in compliance and whether any rules or procedural breaches can be identified.

Such a programme can be designed to ensure that all aspects of an operator's business are subject to periodic review. The frequency with which such checks may be carried out will vary according to the activities involved and the relative risk attached to each of them.

Supervisory work may then seek to confirm that the monitoring programme covers all aspects of an operator's business and that the checks which have been developed are appropriate.