When is remedial action required?
The financial services regulatory environment has grown overly complex in the last decade. Regulators have increased the level of regulation to achieve their primal objective of reducing risk in financial markets, protecting investors and deterring the use of the financial system by criminals. This means that to remain compliant with the regulatory requirements is much more difficult and goes beyond blindly following the rulebook.
Regulatory breaches can indicate failures of a compliance control that need to be reviewed and in some cases changed. Depending on the type of breach, your Firm could be faced with a damaged reputation, paying fines to the regulator, or even having your authorisation revoked.
To protect your Firm, it is vital that you are proactive with your compliance arrangements and monitor your activities to ensure compliance with applicable regulations. It is important to comply with not just the letter of the law but also the spirit of the law, as we have often found that not only will regulators take action over breaches of rules, but breaches of principles as well.
You’ve identified a potential regulatory problem, how can you identify an effective compliance partner to steer you to the best outcome for your Firm?
Our compliance remediation offering can save your Firm from regulatory action. The first stage of remediation is identifying that there is an issue. This may be identified from your own internal compliance monitoring, from an independent review of your systems and controls or from a customer complaint. The key is that once an issue has been identified, you must take swift action to remedy the deficiency so that not only will you notify the regulator of a problem, you can also notify them of the solution and the steps taken to remedy the situation.
Key areas where firms have engaged our compliance remediation specialists include:
- Past business review - we will review the way your Firm has operated in the past and identify areas of non-compliance, which can then be discussed with senior management to come up with a workable solution.
- Client file review - review onboarding process, client classification, client agreements, and retention of records, as many regulatory actions focus on AML deficiencies. Remediation projects on client files is a key area of our AML review offering and is a key area of focus for regulators. Businesses grow, as do client bases either organically or through acquisition. Ensuring that your files remain up to date and in line with ever-changing regulatory requirements can be quite a challenge. If you know this is an area where deficiencies are appearing CCL can come into your Firm and assist in rectifying current files, updating processes and assist with onboarding going forward.
- Policies and Procedures review - we will review your Firm’s current policies and procedures proposing changes where relevant. This is an area which gets forgotten about until the regulators or internal audit ask for evidence that your policies and procedures are being followed. Sometimes these documents are written prior to being regulated and not updated for current business models or regulatory requirements. They may also state that certain things happen at a particular frequency when in reality they do not. This type of remediation avoids the most obvious regulatory or internal findings of simply not complying with your own procedures or not keeping them up to date. Not only can CCL assist in updating documents, but we can also assist in making them work for you and your team.
- Staff training - one of the key areas in rectifying an issue or following a remediation review is staff training. So often firms introduce new policies but do not invest in training their staff on them. Training can be time-consuming to do internally, with not just the delivery but also the creation of comprehensive and appropriate content. We can assist you with identifying the best way to train your staff on the relevant changes with face-to-face, eLearning, case studies or roundtable, and deliver the training you require.
Your compliance remediation specialist
If you know, or suspect, that you are not meeting the standards set internally or by your regulator, CCL can provide the resources and expertise to assist with the remediation work that will protect you from enforcement action and potential reputational damage. Contact our remediation specialists for decisive and effective support.