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2010 has seen a number of new rules and changes to old rules following the Walker Review and the publication of PS10/15. The role of good governance in financial services firms continues to be high on the international and domestic agenda.
Internationally, since January, the Basel Committee on Banking Supervision issued a set of principles in March 2010 for consultation. These principles are for enhancing sound corporate governance practices within banking organisations. In June, the European Commission published its Green paper on Corporate Governance.
Domestically, the Financial Reporting Council has now published a new (May 2010) edition of the UK Corporate Governance Code and in July 2010, published The UK Stewardship Code. The Financial Services Authority (FSA) Chief Executive Hector Sants’s made a speech on 17 June to the Chartered Institute of Securities and Investments (CISI) conference drew attention to the importance of a firm’s culture in developing good regulatory outcomes and the role that governance plays in this.
Sir David Walker’s Review made several recommendations including the role of the Chief Risk Officer and the establishment of Risk Committees and the temptation of many firms will be to say “we are too small to consider risk officers or committees”, or using the FSA’s term of appropriate and proportionate would claim that they are not of significant size, turnover or risk rating to warrant such attention. In some cases this may be true but in many it could be a false assumption. There could be a number of items that get overlooked because you have been running the business for years and are “on top of everything.” Unfortunately a number of firms have found that they are often lacking in Systems & Controls (SYSC) requirements, even Article 3 Exempt firms, which quickly become apparent after a themed visit from the FSA and a Section 166 Report demand dropping into their inbox. This can be avoided and our eBook, A General Guide to S166 Reports, available from the CEI Compliance website www.cei-compliance-limited.co.uk
Risk assessment can be difficult to anyone who is too close to the business. However, that said, it is not impossible and often a good 75% can be done effectively in this way. It is often best to get a third party overview of the work done, just as you would expect a quality assurance check on people who check files.
If you plan your activity and spend time using each step properly and thoroughly then you will form the basis of a Compliance Risk Register (CRR), supporting document to your Management Information (MI) and provide a dashboard for presenting/reporting to the other senior managers within the firm. This also provides a handy tool (historic and contemporary) for any regulatory visits and keeps you focussed on the higher risk elements and any that are nearing your Compliance Risk Appetite (CRA). This not only makes good business sense but also helps to show you have considered the elements to demonstrate that you are Treating Customers Fairly. Full whitepaper is available free from compriskass@ceicompliance.co.uk
Internationally, since January, the Basel Committee on Banking Supervision issued a set of principles in March 2010 for consultation. These principles are for enhancing sound corporate governance practices within banking organisations. In June, the European Commission published its Green paper on Corporate Governance.
Domestically, the Financial Reporting Council has now published a new (May 2010) edition of the UK Corporate Governance Code and in July 2010, published The UK Stewardship Code. The Financial Services Authority (FSA) Chief Executive Hector Sants’s made a speech on 17 June to the Chartered Institute of Securities and Investments (CISI) conference drew attention to the importance of a firm’s culture in developing good regulatory outcomes and the role that governance plays in this.
Sir David Walker’s Review made several recommendations including the role of the Chief Risk Officer and the establishment of Risk Committees and the temptation of many firms will be to say “we are too small to consider risk officers or committees”, or using the FSA’s term of appropriate and proportionate would claim that they are not of significant size, turnover or risk rating to warrant such attention. In some cases this may be true but in many it could be a false assumption. There could be a number of items that get overlooked because you have been running the business for years and are “on top of everything.” Unfortunately a number of firms have found that they are often lacking in Systems & Controls (SYSC) requirements, even Article 3 Exempt firms, which quickly become apparent after a themed visit from the FSA and a Section 166 Report demand dropping into their inbox. This can be avoided and our eBook, A General Guide to S166 Reports, available from the CEI Compliance website www.cei-compliance-limited.co.uk
Risk assessment can be difficult to anyone who is too close to the business. However, that said, it is not impossible and often a good 75% can be done effectively in this way. It is often best to get a third party overview of the work done, just as you would expect a quality assurance check on people who check files.
If you plan your activity and spend time using each step properly and thoroughly then you will form the basis of a Compliance Risk Register (CRR), supporting document to your Management Information (MI) and provide a dashboard for presenting/reporting to the other senior managers within the firm. This also provides a handy tool (historic and contemporary) for any regulatory visits and keeps you focussed on the higher risk elements and any that are nearing your Compliance Risk Appetite (CRA). This not only makes good business sense but also helps to show you have considered the elements to demonstrate that you are Treating Customers Fairly. Full whitepaper is available free from compriskass@ceicompliance.co.uk
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Managing Consultant,Lee WerrellPhone : 07801864980
Email : lw@ceicompliance.co.uk
