The Most Important Compliance Best Practices You Need to Know

The growing enforcement against money laundering has made it clear that banks and other financial organizations cannot afford to go easy on their Anti Money Laundering Programs. A number of financial institutions have been in the news lately for violating BSA requirements, showing the risks involved in ignoring this important regulatory requirement:

Companies in the financial services domain have been tentative about using social media to promote and market their products and services. Uncertainty about which regulation would apply to this relatively new communication phenomenon and horror stories of license suspension or hefty fines for non compliance have scared off even the most well known firms in finance.However, with the recent release of guidance notices from FINRA and communications from the SEC, the regulatory requirements have become clearer. This white paper discusses five best practices that financial services firms should implement to ensure compliance with the current regulatory requirements, including how to supervise, whether recordkeeping is necessary and what should be done about third party content.

Banks and other financial institutions have benefited massively from modern systems thatfacilitate quick transactions across the world. But these same systems can be abused bycriminals spread across geographies and institutions that turn a blind eye to such suspicioustransactions can pay a heavy price when they are caught by regulators. Thus, organizationsmust ensure that they have strong anti-money laundering programs in place to prevent suchactivity and the cornerstone of a strong program is a robust Suspicious Activity Reporting (SAR)process. This White Paper describes some of the best practice that banks and other financial organizations can adopt in order to build an effective and efficient SAR process.

In this article, James Bone, a leading expert on GRC, analyzes the recent speech Mary Jo White, Chair of the S.E.C, gave at the the Council of Institutional Investors in Chicago this fall.

James Bone, a leading expert on GRC, explains why risk management programs at most companies are failing, why the organizations are not aware of this phenomenon and how to rectify the situation.

Yesterday the EU announced its plan to limit bonuses for bankers – the union said that bankers’ annual bonuses should not exceed their annual salaries. The limited bonus plan is a further requirement for banks to follow in order to comply with Basel III and aims at curbing the kinds of risks that bankers have taken in the past to further profit (and led to the recent financial crisis).

Basel III regulations were agreed upon to prevent the sort of economic crisis that the US and some other developed countries experienced, post 2008. The new rules are to be implemented in phases. The first set of rules is to fall in place by January 2013. The Basel Committee criticized the US, EU and Japanese banks for not coming up to expectations for phasing in Basel III requirements.

In a bid to reduce volatility in the US stock markets, the Securities and Exchange Commission (SEC) has approved two new proposals. These proposals are aimed at modifying trading curbs on individual stocks and the broader US stock markets as a whole.

The Dodd Frank Act, enacted in June 2010 was a result of the 2008 recession. To prevent the recurrence of the financial crisis the Act empowered the US government to regulate the financial sector. This has far-reaching consequences both domestically and internationally. This article discusses the international implications of the Act.

Under Title I of the Dodd Frank Act, two agencies were created to look after the financial health of the US markets – the Financial Stability Oversight Council (FSOC) and the Office of Financial Research. This article discusses why the FSOC was created and the recent lawsuit challenging its constitutionality.

The Orderly Liquidation Authority (OLA) was created under Title II of the Dodd-Frank Act that was enacted in June, 2010. The OLA’s purpose is to prevent those large institutions that are categorized as Systemically Important Financial Institutions (SIFI) from failing.

This article discusses how the OLA came to be and how it modifies the FDIC's current role in the liquidation process.

In the last few weeks, the banking world has been rocked by revelations that derivatives traders at Barclays were rigging the LIBOR rates. This Q&A explainer demystifies some of the core issues behind this event.

The Committee on Payment and Settlement Systems (CPSS) and the International Organization of Securities Commissions (IOSCO) have set some new standards for Financial Market Infrastructure (FMI). FMI includes the clearing and settlement systems as well as the recording of financial transactions. It includes the systemically important payment systems, depositories, securities settlement systems and trade repositories.

In May 2012, the Chief Executive Officer (CEO) of J P Morgan Chase, Jamie Dixon, announced that the bank had suffered losses to the tune of USD 2 billion because of mistakes made while trading in derivatives. This article discusses the background to this event and the risk controls that could have prevented it.

UK’s Financial Services Authority (FSA) fined Coutts Bank GBP 12.5 million for not having adequate checks in place to prevent money laundering practices by their customers. The FSA reviewed Royal Bank of Scotland’s Coutts Bank for a period of three years between 2007 and 2010. The fine was reduced to 70 per cent of that amount – GBP 8.75 million since Coutts Bank agreed to an early settlement. This article discusses the background and best practices that could have prevented this punitive action against Coutts.

The largest retailer in the world, the US multinational company (MNC) Walmart operates in 15 countries around the world with 8,500 stores. An article that appeared in April 2012 in New York Times has accused the largest private employer in the world of indulging in acts of bribery in Mexico.

UK’s Financial Services Authority (FSA) expects UK-based investment banks to maintain effective systems of control to check financial crime risk in the firm, i.e., the risk that anyone in the firm or on behalf of the firm engages in bribery or corruption. The FSA visited 15 firms – eight major, global investment banks and other smaller firms that were into investment banking activities to assess the extent of compliance with its instructions on Anti-bribery and Corruption (ABC) controls.

Shadow banking refers to the activities, practices and transactions of all financial entities that are outside the purview of the banking regulator. The whole range of leveraged non-bank investment conduits, vehicles and structures fall under shadow banking activities. The European Union (EU) proposes to further regulate shadow banking activities for a number of reasons. This article explains these reasons and the likely impact of the regulations.

The Advanced Measurement Approach (AMA) framework seeks effective governance, risk capture, assessment and quantification of operational risk exposure. Banks have the freedom though, to develop operational risk measurement and management programs, processes, and tools that are appropriate to their activities, business environment, and internal controls.

This article details the elements that have to be included in a model framework and the best practices for compliance.

The Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have jointly announced a rule proposal to help protect investors from identity theft. This is to be done by ensuring that SEC- and CFTC- regulated entities detect and respond to warning signs or red flags.

This article details best practices that firms can follow in order to ensure compliance with the proposed rule.