Governance, Risk & Compliance

Promontory, by settling, bows to realities of legal challenges against regulators

In a swift reversal of its earlier determination to sue the New York State Department of Financial Services, the Promontory Financial Group, a leading consultant to the industry, took what some observers say is the kind of advice it typically offers clients when accused of wrongdoing: settle. (more…)

IA BRIEF: The state of adviser social media compliance in the U.S.

IA BRIEF: The state of adviser social media compliance in the U.S.

In the past year compliance professionals have been preoccupied with preventing cybercrime, and rightfully so, with recent high-profile cyber attacks and increased regulatory attention. However, the compliance implications of social media in the financial services sector remain an evolving trend as well, with high importance. A recent investment adviser survey offers a glimpse at the state of the current adviser programs while exposing new risks.

The survey , currently in its 10th year, was conducted by the U.S. Investment Adviser Association, ACA Compliance Group and OMAM. The highest percentage of firms surveyed were established firms with 6-25 years in the business and having assets under management ranging between $1-10 billion. (more…)

Global finance leaders to banks: reform culture and conduct or face more regulation

Global finance leaders to banks: reform culture and conduct or face more regulation

A number of the world’s largest banks are still failing to implement much needed cultural and conduct reforms in their businesses, and a failure to do so could spur more government regulation, a long awaited report by the Group of Thirty (G30) forum of international finance leaders said on Thursday.

The G30 said that efforts had been made to strengthen internal cultures, but many banks still need to implement reforms on compensation and the dismissal of employees – including top executives. In addition, the group argued for new approaches to hiring policies, and stronger roles by boards of directors to ensure cultural and conduct changes. (more…)

Effect of Russian sanctions on compliance

The Russian sanctions have brought the whole concept of sanction screenings into a world where traditionally people didn’t pay much attention to it. Now they have taken on a whole new complexion with the inclusion of narrative and ultimate beneficial ownership requirements. Are you prepared for the effect on compliance?

Learn more about Thomson Reuters Risk Management Solutions.

COMMENTARY: Three steps to more resilient risk-management systems – DTCC risk chief

REUTERS/Kevin Lamarque

Of all the changes to global financial markets in recent years, the risk management function has undergone one of the most dramatic transformations in the industry. The discipline is broader, more sophisticated, and more diverse than ever before, encompassing new responsibilities that add operational, systemic, technology, vendor, and physical risk, as well as business continuity management, to the more traditional financial risk categories.

To meet and defend against these new challenges, firms must take certain fundamental steps to gain a more holistic view of the risks they face. (more…)

Do you know your state of readiness for Solvency II?

solvency II

By Conor Coughlan, Global Head, Proposition Marketing, Thomson Reuters

In this fast paced world, where we face what seems to be an ever growing regulatory landslide, not sinking into the earth or being swept away but actually staying on top of all the necessary changes, is a major challenge. Recently you may have noted my focus on Solvency II, which is due to be implemented across the European Union and (EEA) from January 2016 onwards. Don’t be fooled into thinking this is just a matter for European firms because it has many implications for American or Asian insurers who have European subsidiaries!

Described by many as the “Basel for Insurers” Solvency II is a beast of a regulation. It has a complex structure, with a three pillar alignment and its requirement for entirely new or consolidated data sets and reporting models means it’s a ‘game changer’ for the insurance sector and their service providers.

solvency II regulatory reportingWhen we first started tracking Solvency II we were surprised at how revolutionary but warranted the regulation would be.

I was personally surprised at how infrequent insurance firms had to report on their holdings (in the past) and that many did not know what funds they had ultimately invested in.

Equally it was clear that this regulation would not only impact Insurers but also their asset managers and their related asset servicers’ (fund administrators & custodians).

In many ways the entire investment supply chain in the insurance industry now has to change to meet these far reaching regulatory obligations.


SEC’s ‘administrative proceedings’ enforcements dwarf court cases in 2015

REUTERS/Jonathan Ernst

Firms facing enforcement actions by the Securities Exchange Commission have growing reason to worry should such actions take the form of “administrative proceedings” rather than court cases, a tool that critics say limits options for those in the agency’s crosshairs. In first half of 2015, the securities regulator has shown no signs of dampening its increasing reliance on administrative proceedings.

According to public data on the SEC’s site, there have been 447 administrative proceedings through June 23rd of this year, compared with 123 court cases, representing 78 percent of all enforcement actions. The result is in line with the same percentage in 2014, and up from 62 percent in 2013. In 2010, the year the Dodd-Frank reform act was passed, only 56 percent of enforcement actions were filed as administrative proceedings. (more…)

Lessons learned: BHP Billiton fined for providing public officials luxury travel

REUTERS/David Gray

The Securities and Exchange Commission on Wednesday charged global resources company BHP Billiton with violating the Foreign Corrupt Practices Act (FCPA) when it sponsored foreign government officials as guests at the 2008 Summer Olympics in Beijing.

As a result of the SEC’s cease and desist order, BHP Billiton agreed to pay a $25 million penalty to settle the regulator’s charges. BHP is headquartered in the UK and Australia and trades on the New York Stock Exchange via American Deposit Receipts, giving the SEC civil-enforcement jurisdiction in this case. (more…)

Finance, legal professionals question impact of OSC Whistleblower Program on ‘culture of compliance’

Finance, legal professionals question impact of OSC Whistleblower Program on 'culture of compliance'

The Ontario Securities Commission (OSC) recently closed the consultation period on its proposed whistleblower program, but debate over the draft rules appears to be far from over. Finance and legal professionals have raised concerns over the program, particularly the absence of requiring eligible whistleblowers to report misconduct to internal compliance personnel prior to approaching the OSC.

Modeled after the Dodd-Frank Whistleblower Program, the OSC’s Whistleblower Program seeks to encourage individuals with information of financial misconduct at their firms to come forward. (more…)

Former U.S. CFTC chair criticizes Volcker call to merge agency with SEC

Former U.S. CFTC chair criticizes Volcker call to merge agency with SEC

A former head of the Commodity Futures Trading Commission has questioned Paul Volcker’s call to merge U.S. regulatory agencies under the leadership of the Federal Reserve. (more…)