With a raft of regulatory changes coming into force over the last few years, financial firms have incurred many system, process, policy and procedure changes. Overseeing and managing all of the moving pieces presents a challenge for compliance teams.
Senior Management and Compliance Officers must be confident that their governance, risk, and compliance framework is current, sufficiently comprehensive and ultimately effective. Without appropriate processes and documentation in place, firms expose themselves to regulatory scrutiny, which may have a negative impact when seeking new clients or fundraising.
Periodic and systematic reviews of a firm’s compliance arrangements can help:
- a firm to be satisfied that it’s compliant;
- ensure a more positive outcome to any due diligence process a firm may be subject to;
- benchmark firms against their peers; and
- avoid the cost and reputational damage of regulatory scrutiny.
Recent compliance reviews carried out in the UK by ACA on financial market firms identified, on average, 24 different regulatory failings or weaknesses. This highlights the need for regular testing of a firm’s governance and control arrangements as well as policies and procedures to help manage operational and regulatory risk.
When it comes to your firm’s compliance, you should ask yourself five things:
- Record keeping – can you demonstrate compliance?
- Do you have the necessary policies and procedures in place and are they up to date?
- Is there sufficient knowledge of relevant policies and procedures by people within your firm?
- Do you know all the regulatory obligations that fall on your firm and how they are met?
- How confident are you that your arrangements are sufficiently robust?
If any of these questions trigger uncertainty, a compliance review of your firm’s governance and control environments, including policies and procedures is strongly recommended.
Listen to our recent webcast, The Dirty Dozen: 12 most common compliance failings for UK firms and how to avoid them, to learn more about recurring issues and potential pitfalls identified across a firm’s compliance arrangements, based on our recent compliance reviews.
HOW ACA CAN HELP
We have developed a suite of Compliance Review Services that offer three levels of assessment designed to help identify gaps in your existing governance and control arrangements as well as policies and procedures from a completeness and rule requirement perspective. At the completion of the review, an exception only report details any recommendations or any areas of remediation.