The Financial Conduct Authority's much-trumpeted Consumer Duty comes into effect on July 31. An amendment to the Financial Services Act in 2021 in the House of Lords gave the regulator a year to bring in rules concerning the level of care firms provide to consumers. This turned into the Consumer Duty and last July the FCA set out its rules. The FCA has issued an unprecedented set of guidance on the duty. In this episode of Compliance Clarified, managing editor Alex Robson talks to senior...

The Australian arm of consulting firm PwC is embroiled in an unprecedented political scandal following revelations that senior staff sold confidential information on government tax reforms to its multinational clients. PwC is defending allegations that it engaged in a deliberate multi-year strategy to cover up a breach of confidentiality in the tax leak scandal. The form stands accused of "monetising" confidential information that it obtained as a consultant to the government on laws to...

U.S. banking regulators are homing in on more effective stress testing after admitting they were behind the curve in their supervision of Silicon Valley Bank. The bank collapsed in March, alongside Signature Bank, and was later joined by First Republic. Further problems are expected for smaller, regional banks, but regulators have to date seen off fears about a 2008-style financial crisis. In this episode of Compliance Clarified, Alex Robson, managing editor in London, is joined by Henry...

Financial institutions in the United States are filing an exceptionally high volume of suspicious activity reports (SARs), with more than 3.6 million SARs submitted in 2022, a 57% increase over pre-pandemic (2019) levels. Additionally, suspicious activity reporting is on pace to set another annual record in 2023. A special report published recently by Thomson Reuters takes a deeper dive into the data offering valuable insight into critical areas of financial crime. A link to the report is...

The UK Financial Conduct Authority (FCA) says it views whistleblowers as a valuable source of intelligence. But whistleblowers feel far from valued by the FCA, according to the findings of the regulator's own survey. In 2019, the FCA board commissioned a review of its whistle-blowing offering, which was delayed by the pandemic and published in May this year. The self-assessment found whistleblowers were dissatisfied with the FCA's offering. In response it has set out some changes it is...

Firms need to re-engineer their anti-money laundering (AML) systems and controls to refocus on know-your-customer (KYC) processes to prevent the inevitable pile-up of transaction monitoring alerts. Firms' pivot to digital onboarding has prioritised speed over collecting enough information to determine whether transactions are suspicious. It has created an inefficient, expensive process where AML analysts are sifting through thousands of alerts looking for the proverbial needle in a haystack....

Financial services firms in the Asia-Pacific region have been shocked out of their complacency in the past year, with scams, frauds and other cyber-related crimes increasing exponentially. In Australia alone, consumers reported a record A$3 billion in losses last year — up from A$850m just two years earlier. The rapid pivot to digital financial services and non-face-to-face business during the pandemic has been cited as a major driver for this trend. The economic turmoil in developing...

Compliance officers are operating with limited sets of resources while simultaneously managing a diverse and expanding range of subject areas where the volume of regulatory change is expected to increase. The 14th annual Cost of Compliance, published by Thomson Reuters Regulatory Intelligence, found costs are expected to increase with difficulties recruiting appropriately skilled staff also reported. In this episode of Compliance Clarified, managing editor, Alex Robson, is joined by Mike...

Anti-money laundering (AML) control failings at Santander Bank UK opened the door to a financial intermediary with links to Colombian drug cartels operating in Britain. Beltcastle, a payments service provider, is "Customer A" featured in the Financial Conduct Authority's (FCA) final notice in December 2022 to illustrate the failures behind Santander's £107 million fine. Beltcastle, which was authorised by the UK regulator for eight years, put about £1.3 billion in cash through the UK Post...

The triggering of a complete write-down of the nominal value of all Credit Suisse AT1 debt has come as a shock to some investors. Regulators took what some saw as an irregular move to write down 16 billion Swiss francs of Credit Suisse bonds, known as Additional Tier 1 or AT1 debt, to zero, during UBS's rescue of Credit Suisse on the weekend of March 18/19. In this episode of Compliance Clarified, Alexander Robson, managing editor of Regulatory Intelligence in London, is joined by Helen...

The collapse of Silicon Valley Bank sent shockwaves through the venture capital and technology industries. It has had uncomfortable echoes of the 2008 financial crisis with regulators and other policymakers working through the weekend to engineer solutions to avoid further contagion and possible systemic risk. And that was the weekend of 11/12 March; this weekend just gone, regulators and policymakers were busy with the shotgun wedding of UBS and Credit Suisse. In the UK, HSBC has bought SVB...

The world's largest primary bullion producer, Australia's Perth Mint, has found itself at the centre of one of the country's biggest risk and compliance failures following a six-month investigation led by Thomson Reuters Regulatory Intelligence. The government-owned entity has found itself defending regulatory spot fires on a range of fronts. These include a major money laundering audit, answering parliamentary questions about sub-standard gold deliveries to Shanghai, defending a failure to...

This special episode of Compliance Clarified was recorded for International Women’s Day. Rachel Wolcott and Lindsey Rogerson, both senior editors at Regulatory Intelligence in London, are joined by Dr Louise Ashley of Queen Mary University’s London School of Business and Management and Centre for Research on Equality and Diversity. Louise has spent a decade researching social inclusion in the City of London. Her book Highly Discriminating: Why the City Isn't Fair and Diversity Doesn't Work...

"Do as I say, not as I do," is an adage that will echo through the ages. But rarely do we hear it uttered within the hallowed halls of financial regulators. In Australia, this month, the adage is ringing loudly and clearly at the financial conduct regulator. A misconduct investigation involving the most senior staff at the Australian Securities and Investments Commission (ASIC) has highlighted the challenges of building and maintaining a strong organisational culture — even for the...

This episode of Compliance Clarified looks at the UK enforcement outlook for 2023 and, notably, the work of the Financial Conduct Authority (FCA). Change is in the air with the arrival of Ashley Alder as chairman from Hong Kong's Securities and Futures Commission and the upcoming departure this spring of Mark Steward, the FCA's long-serving enforcement director. In this episode, Alexander Robson, managing editor, is joined by Rachel Wolcott and Lindsey Rogerson, senior editors in London, to...

The U.S. SEC’s annual list of examination priorities is a key document setting the agenda for financial services compliance professionals on Wall Street and Main Street. This year the regulator signals it will be examining investment advisers and broker-dealers in light of the “tumult and change” caused by geopolitical and economic events, as well as by rule changes it has imposed in recent years. In this episode, Randall Mikkelsen, managing editor for North America for Regulatory...

If there is one certainty for compliance professionals in the year ahead, it's that they need to be ready for the unexpected. This episode looks at the top regulatory trends for financial services firms in the Asia-Pacific region in 2023. Discussion topics include cyber risk, the war in Ukraine, the post-pandemic economic recovery, and emerging market economic crises, which all set the stage for a volatile and challenging year ahead. Geopolitical tensions have risen to a level not seen...

This episode looks at top concerns for U.S. financial services compliance professionals this year. Among the biggest emerging issues: Regulatory scrutiny over Wall Street’s involvement in the crypto sector, a proposed revamp of the securities market structure, increased scrutiny of private equity and accounting, and new regulatory exam priorities. In this episode of Compliance Clarified, Randall Mikkelsen, managing editor for North America, is joined by Todd Ehret, senior regulatory...

In the first episode of the new series of Compliance Clarified we discuss 10 things UK and EU Compliance officers need to consider in 2023. In 2022, the financial services sector was influenced by many different factors. On a global level geopolitical, climate and economic risks dominated government’s agendas. Financial services firms were having to find new and innovative ways to address these challenges and the regulatory landscape flexed with more regulations in diversified areas to...

This episode of Compliance Clarified explores the obligations of U.S. investment advisers under a new regulation that gives giving them more opportunities to advertise. The marketing rule adopted by the U.S. Securities and Exchange Commission took full effect in November. It is designed to let advisers use many methods long practiced in other industries, including testimonials, endorsements, performance reporting and third-party ratings. It also establishes new compliance obligations,...

The first significant post-Brexit changes to UK financial services regulation were announced on December 9 by Jeremy Hunt, Chancellor of the Exchequer. The so-called 'Edinburgh Reforms' represent an attempt to honour government election manifesto promises and include possible changes to the Senior Mangers Regime, short selling, Solvency II and research rules under MiFID 2, among others. In this episode of Compliance Clarified, Lindsey Rogerson and Rachel Wolcott, senior editors in London,...

This episode of Compliance Clarified considers the regulatory future of digital assets following the collapse of cryptocurrency exchange FTX. The failure has turned as many as 1 million customers from account holders into bankruptcy creditors, and cost its backers hundreds of millions of dollars. Regulators around the world are investigating what FTX’s new CEO called a “complete failure of corporate control.” Policy makers are calling with increasing urgency for new rules, but others say...

The EU Digital Operational Resilience Act (DORA) aims to ensure that all participants in the financial system have the necessary safeguards in place to mitigate cyber-attacks and other risks. The legislation will require firms to ensure that they can withstand all types of ICT-related disruptions and threats. It complements existing laws such as the Network and Information Security Directive (NISD) and the General Data Protection Regulation (GDPR). In this episode, Alexander Robson,...

Australian gambling giant Star Entertainment Group was last month fined A$100 million for failing to stop money laundering at its Sydney casino. The group's licence to operate the casino has also been suspended. Casino operators in Australia have been under great pressure to reform their gambling operations following reports of widespread criminal activity. The record penalties were announced in response to a damning inquiry in New South Wales (NSW) earlier this year. The Star is not...

This episode examines two consultations published by securities regulators at the COP27 climate conference designed to foster fair and efficient carbon markets. One deals with voluntary carbon credits and the other deals with so-called CCMs (compliance carbon markets) and aims to assist with the establishment and supervision of national/governmental schemes. In this episode, Alexander Robson, managing editor, Regulatory Intelligence, is joined by Lindsey Rogerson, senior editor, EMEA...