Offshore reflections in early 2016
Throughout 2015 Deloitte has been advising regulated businesses on best practice compliance with AML laws and regulations as well as consumer-focused regulation. As Sally Rochester and Anna Sabiston report, adapting to evolving regulatory expectations and dealing with remediation issues in an effective and efficient manner continues to be a focus area for boards and management teams across the financial services industry.
Suitable advice for consumers
In relation to investment business, and irrespective of how complex or simple the product is, clients have asked us to consider whether the documenting of customer needs and the rationale to support investment recommendations can, with the benefit of hindsight, withstand regulatory scrutiny.
Point of sale requirements which establish how a product is deemed suitable for a customer based on their appetite for risk and loss and the ongoing monitoring of the lifecycle of the product against changing customer needs are both key to ensure firms can demonstrate ongoing suitability.
The implementation of a successful and sustainable governance framework must ensure the customer remains centric to all business decisions. Consideration of these points by the regulator remains at the top of the agenda in the wake of the Review of Financial Advice and, more recently, the Jersey Financial Services Commission mystery shopper report.
Customer Due Diligence (CDD) reviews
How we have conducted our reviews of the assessment of compliance with prevailing AML/CFT regulations has varied. This is based on the assessment of information presented in client files and extends through to considering the appropriateness and operational success of policies, procedures and controls in order to assess the overall effectiveness of the governance framework.
Themes arising from such reviews include varying degrees of accountability for CDD by senior management and the resulting culture across the business. In some cases, such issues have been seen to materialise the risk of CDD requirements diminishing in priority and importance in comparison to other matters of commercial significance, resulting in poor compliance with the regulations.
2016 outlook…CPR and conduct risk management
Deloitte’s annual Jersey Compliance Officer Survey is in the process of being compiled, but there are some interesting themes emerging on the implementation of the new Civil Penalty Regime and how some firms are re-establishing their strategy and vision to ensure effective conduct risk management with consumer outcomes remaining at the heart of all aspects of their business. Sign up to receive the final report.