Governance, Risk & Compliance

Lessons from 2015: investor-centered compliance takes center stage in U.S.

Lessons from 2015: investor-centered compliance takes center stage in U.S.

The course of regulatory developments in the United States in 2015 showed a decided focus on investor protections, tracking illicit financial flows, protecting data and ensuring overall cyber security. Furthermore, there was continuing discussion of the independence and financial commitment firms must give to compliance leadership.

At this point in the new year, a look back at the challenges of 2015, lessons learned and accomplishments can give firms an opportunity to fine-tune their compliance program’s policies, procedures and controls. (more…)

COMMENTARY: Insurance mergers face U.S. regulatory uncertainty despite inversions clarification

COMMENTARY: Insurance mergers face U.S. regulatory uncertainty despite inversions clarification

Although the pharmaceutical industry has drawn a lot of the attention given to corporate inversions, the regulatory environment for these tax-saving corporate relocation transactions also affects insurance mergers.

The insurance sector faces similar consolidation pressures. They are driven, for example, by declining reinsurance premiums as investors aggressively seek yield in competing products including insurance-linked securities. Proposed anti-inversion regulations contemplated by recently-issued Treasury/IRS Notice 2015-79 help mollify insurers by clarifying the “cash box” issue regarding passive assets, but M&A activity in the insurance sector is still fraught with regulatory uncertainty. (more…)

IA Brief: Year-end chores list: do what you say

IA Brief: Year-end chores list: do what you say

The looming turn of the calendar offers a good occasion for investment adviser compliance officers to make good on their promises.

A successful compliance program has customized policies and procedures with two elements — due dates and continuing tasks — designed to prevent violations of the Advisers Act. To accomplish this, the policies and procedures must outline the required regulatory filings with definite due dates, as well as describing ongoing tasks or reviews required to satisfy the supervisory element of the program. (more…)

Thomson Reuters Annual Cost of Compliance Survey

Thomson Reuters compliance costs

Thomson Reuters Regulatory Intelligence has launched its annual survey on the cost of compliance for regulated firms.

The survey results will draw a year-on-year comparison allowing you to benchmark your views against your compliance peers, whilst gaining insight into the direction the role of compliance is taking within the financial services industry.

The survey should take around 5 minutes to complete. All information will be treated in the strictest confidence and results will be displayed anonymously. We intend to collate the results for a special report on the cost of compliance which will be available in Q2 2016.

The survey will close on Friday January 29th, 2016.

Take Survey

Spotlight hits technology platforms as U.S. mulls fiduciary standard

Spotlight hits technology platforms as U.S. mulls fiduciary standard

It was during a congressional hearing in June that U.S. Labor Secretary Tom Perez spoke about how technology companies can help investors in making better choices about their investments. Perez said several times that automated portfolio advice services, or “robo-advisors,” can help the government to meet its goal of getting firms to offer retail investors suitable products at an affordable price.

“Not only is it possible to provide fiduciary service at low cost to small investors nationwide, but that the market rewards these efforts,” Perez said. (more…)

IMPACT ANALYSIS: Managing the risks of compliance outsourcing

IMPACT ANALYSIS: Managing the risks of compliance outsourcing

As regulators increasingly tell companies to bolster their compliance programs, some of them are turning to outside experts to provide the creation or management of such programs by outsourcing all or parts of the chief compliance officer job.

An assortment of consultants and law firm attorneys serve as these outsourced CCOs, and they may fill the role at a number of companies at once. For smaller firms in particular, the approach provides the independent compliance expertise when the needs might otherwise be hard to meet. But responsibility for the program’s vulnerabilities remain with the contracting firm in the eyes of regulators, and firms should carefully consider how they risks of the outsourcing process. (more…)

COLUMN: Picture set to clarify for captive reinsurance regulatory muddle

COLUMN: Picture set to clarify for captive reinsurance regulatory muddle

The regulatory environment for captive reinsurance, the technique used by life insurance companies to leverage statutory reserves seen as redundant and free up capital for other purposes, may soon come to a head after being in flux since 2013 .

This is when the New York State Department of Financial Services (New York DFS) began a quest to protect policyholders and taxpayers and stamp out the practice, which it dubbed “financial alchemy.” (more…)

Spoofing or just fast trading? Chicago case helps unwrap mystery

REUTERS/Akhtar Soomro

Compliance professionals were startled when a jury in the futures industry’s home base of Chicago convicted a veteran commodities trader of “spoofing,” a crime punishable by up to 25 years in prison but involving a kind of market manipulation once thought too vaguely defined to be prosecuted. It was surprising that a case of such complexity could be brought to such a conclusion, even more that jurors took just an hour of deliberation to do so.

Compliance officers are on a crash course to learn the implications of the case at a time when high-speed trading still accounts for nearly half of the trading volume on markets. The Chicago case also provides a precedent in the higher-profile U.S. case of a London trader accused of a spoofing scheme that allegedly led to the “Flash Crash” in 2010. Spoofing involves traders entering and quickly canceling large orders in an attempt to manipulate prices. (more…)

IMPACT ANALYSIS: Ontario regulator’s review cites suitabilty, know-your-customer lapses at exempt market dealers

IMPACT ANALYSIS: Ontario regulator's review cites suitabilty, know-your-customer lapses at exempt market dealers

The Ontario Securities Commission has highlighted Know-Your-Customer (KYC) deficiencies as one of the significant compliance problems facing exempt-market dealers in Ontario. The annual report by the OSC’s Compliance and Registrant Registration branch (CRR) of the Ontario Securities Commission signals that the market regulator of Canada’s financial capital is becoming increasingly more concerned that inadequate KYC efforts by registrants is leading to exempt securities being sold to investors who fail to qualify under a prospectus exemption. (more…)

Message to sports chiefs: stamp out bribery or lose your sponsors

football

This week suspended FIFA president Sepp Blatter made some jaw-dropping revelations to Russia’s Tass news agency about how the World Cup bidding process was run. But football’s sponsors will also have noted this observation from Blatter:

“You cannot destroy FIFA,” he said. “FIFA is not the Swiss bank. FIFA is not a commercial company.”

This follows hard on the heels of comments from Formula 1 chief Bernie Ecclestone, who defended Blatter on Russian TV, claiming corruption should be considered as a tax that has to be paid: (more…)