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compliance

Morningstar has been mounting a persistent advertising campaign on LinkedIn recently. It it, it promotes its due diligence services. An announcement by the USA's Securities and Exchange Commission raises several questions, not the least of which is "who or what is Morningstar"?

BIScom Subsection: 

The Australian Securities and Investment Commission (ASIC) has imposed additional conditions on the Australian financial services (AFS) licence of Societe Generale Securities Australia Pty Ltd (SGSAPL) to ensure compliance with clients' money regulations.

FCRO Subsection: 

Our sister venture, Financial Crime Risk and Compliance Training, has released a micro-course about Deutsche Bank, the New York Department of Financial Services and Jeffery Epstein.

The case creates a new class of risk for all regulated businesses everywhere in the world. There is an early bird discount.

BIScom Subsection: 

It's there. In plain sight. In the body of the press release from the Australian Securities and Investment Commission. It's a statement that ASIC, having been found, damned by its own words and those of the industry, wanting in its supervision of the Financial Services Landscape, is taking the gloves off. It's not going to stand for any more poor compliance. It's going to make "ongoing efforts to improve standards across the financial services industry." So this case is going to be spectacular, isn't it?

BIScom Subsection: 


"Need more help?" says the PayPal page. Another quality control failure....

In or about 2003, I closed our publishing company's account with PayPal because they kept blocking the account. At the time, PayPal wasn't the enormous global powerhouse that it has become. It was, essentially, a bunch of nerds for whom compliance and risk management was a nuisance. When electronic money started to exercise the US government's collective mind, PayPal found that it needed some risk management processes. They didn't do it properly. Then, later, when PayPal expanded into Europe, it migrated our account to its EU operations and put money laundering, etc. risk and compliance in Dublin where they set up systems that were not only rubbish but sent out letters referring to non-existent legislation. But now, a piece of essential third party produced software is pushing us towards at least opening, even if we don't use it, a PayPal account. How hard can it be? Surely they have learned something in...

It has become fashionable to talk of "The Three Lines of Defence" in relation to money laundering, terrorist financing, etc. Is it just more more quasi-militaristic buzzwords, so loved by Americans, and a pretence of intellect or is there genuine merit here?

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Hong Kong's Securities and Futures Commission has suspended the former responsible officer of China Merchants Securities (HK) Co., Limited for compliance failures.

BIScom Subsection: 

Financial crime risk management - be it related to money laundering, terrorist financing, fraud or embezzlement purposes, to say nothing of anti-bribery requirements - is expensive. For small businesses, it's cost prohibitive. Compliance is even worse. Is it feasible, permissible, even advisable to share the burden with others?

On 19th April, Australia's newest national bank, Members' Equity Bank a.k.a. ME Bank, announced that it was to increase its interest rates on existing home loans, with effect from 19th April. Then it made a silly error. Given that the banking sector in Australia is under the most intense scrutiny and that it would be logical to assume that, if at any time, this is the time where banks will double, triple even quadruple check their actions, the stupidity of the error raises a serious question: is the financial sector in Australia simply under-skilled and, therefore, unfit for purpose?

BIScom Subsection: 

For the second time recently, a matter before the Solicitors' Disciplinary Tribunal in England and Wales has considered the use of a firm's clients' account for the provision of quasi-banking services. The SDT is starting to impose more substantial penalties and has clearly had enough of solicitors who fail to comply with their obligations under counter-money laundering laws and regulations. Like in the first case, the solicitor concerned is elderly and one might say that he might be considered as having carried on long-standing practices in the face of changing practice requirements and culture.

The judgment in the AUSTRAC -v-Tabcorp civil case is a landmark: it's the first civil case that AUSTRAC has brought to a conclusion in court. But the judgment is only the latest step in a long running investigation and series of regulatory actions against the ASX-listed gambling giant.

One has to ask what took so long.. after American regulators and prosecutors began attacking European banks for failures in the USA European regulators remained surprisingly reticent about taking action against foreign banks, especially American banks. While it may not be blowback (US banks have long gone their own way in London, as have German and Japanese banks but there have been occasional action against those) it is certainly time that US banks were not treated as a special case. In the latest example, Merrill Lynch has been ordered to pay a penalty that, relative to the scale of the failure and corresponding penalties in the USA, seems relatively small.

BIScom Subsection: 

The Solicitors' Disciplinary Tribunal (which, trendily, omits the apostrophe when it writes its own name) has levied its largest fine ever. Like the previous largest, it's against the London office of a US law firm.

CoNet Section: 

With effect from 4th April, 2018, new rules will apply to Australian financial services (AFS) licensees that hold "derivative retail client money."

Inevitably, it's not that simple. Then again, our detailed analysis shows that compliance should not be expensive or difficult,

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