Compliance officers workshop
This presentation is the property of its rightful owner.
Sponsored Links
1 / 26

COMPLIANCE OFFICERS’ WORKSHOP PowerPoint PPT Presentation


  • 42 Views
  • Uploaded on
  • Presentation posted in: General

COMPLIANCE OFFICERS’ WORKSHOP. MiFID – Systems and Controls. MiFID. Agenda Overview Areas Applicable: General Organisation including Business Continuity Employees including Senior Managers. MiFID. Agenda Compliance and Internal Audit Risk Controls Outsourcing Record Keeping

Download Presentation

COMPLIANCE OFFICERS’ WORKSHOP

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Compliance officers workshop

COMPLIANCE OFFICERS’ WORKSHOP

MiFID – Systems and Controls

Craigcrook Management Services


Mifid

MiFID

  • Agenda

  • Overview

  • Areas Applicable:

  • General Organisation including Business Continuity

  • Employees including Senior Managers

Craigcrook Management Services


Mifid1

MiFID

  • Agenda

  • Compliance and Internal Audit

  • Risk Controls

  • Outsourcing

  • Record Keeping

  • Conflicts of Interest

  • Deilverables included in your pack

Craigcrook Management Services


Mifid2

MiFID

  • Overview

  • Common Platform

  • Super equivalence

  • Remember proportionality

  • New SYSC Rulebook

  • Commencement – 1st January 2007 for CRD firms and 1st November 2007 for MiFID firms

Craigcrook Management Services


Mifid3

MiFID

  • General Organisation

  • Tightening of requirements and increased Senior Management responsibilities compared to SYSC 3

  • Requirements are:

  • Robust Governance;

  • Sound decision making;

  • Clear and effective Organisational structure;

Craigcrook Management Services


Mifid4

MiFID

  • General Organisation

  • Adequate Internal Controls;

  • Effective Internal communication (MI);

  • Adequate safeguards for the security, integrity and confidentiality of information

  • Accounting – unified standard

  • Obligation of continuous Monitoring

Craigcrook Management Services


Mifid5

MiFID

  • General Organisation

  • Formal Verification of Compliance with the Regulatory System -

  • Very much only under consideration at the moment

  • Retain guidance on the Audit Committee

  • Business Continuity

Craigcrook Management Services


Mifid6

MiFID

  • General Organisation

  • MiFID requirements wider

  • Require planning for an “interruption” to business activities

  • FSA Policy on the responsibilities of Senior Managers under review

  • Likely to increase

Craigcrook Management Services


Mifid7

MiFID

  • Employees

  • FSA will require:

  • Awareness of procedures;

  • Segregation of duties;

  • Employees to be competent and have the appropriate skills, knowledge and expertise;

  • Firms to monitor both their systems and individual employees on a ongoing basis

Craigcrook Management Services


Mifid8

MiFID

  • Compliance

  • Creation of a good Compliance culture a priority

  • Compliance to be independent (unless disproportionate)

  • However, then a test of effectiveness applies

Craigcrook Management Services


Mifid9

MiFID

  • Compliance

  • Regular Monitoring Programme

  • Effective Policies and procedures

  • Identification of Risks if non compliant

  • Compliance Officer to report to Board

Craigcrook Management Services


Mifid10

MiFID

  • Internal Audit

  • Viewed as part of the Compliance arrangements

  • Must be separate from Compliance and/or Risk

  • Internal Auditor responsible for audit plan and verifying compliance with recommendations

Craigcrook Management Services


Mifid11

MiFID

  • Internal Audit

  • Internal Audit review of Compliance?

Craigcrook Management Services


Mifid12

MiFID

  • Risk

  • Guidance replaced with High Level Rules

  • Covers all employees

  • Risk Management Strategy covering:

  • Risk assessment;

  • Sets the level of Risk tolerance;

  • Risk management arrangements;

Craigcrook Management Services


Mifid13

MiFID

  • Risk

  • Create Risk strategies and policies;

  • Regular Monitoring of compliance;

  • Provision of Reports to Board (MI)

  • Risk function to be independent of Compliance and Internal Audit

  • Internal Auditor to review Risk function

Craigcrook Management Services


Mifid14

MiFID

  • Risk

  • For Firms also subject to the CRD the following will also be part of the Risk Management Strategy:

  • Credit and Counterparty Risk;

  • Residual Risk;

  • Market Risk;

Craigcrook Management Services


Mifid15

MiFID

  • Risk

  • Operational Risk covering identification, management, monitoring and reporting of operating risks including low frequency high severity risks

Craigcrook Management Services


Mifid16

MiFID

  • Outsourcing

  • MiFID requirements apply to outsourcing of critical or important functions

  • Will apply to all firms activities

  • Outsourcing must not:

  • Impair Internal Control;

  • Ability of FSA to supervise Firm;

Craigcrook Management Services


Mifid17

MiFID

  • Outsourcing

  • Result in the delegation by Senior Managers of their responsibility;

  • Relationship with clients must not be altered;

  • A series of conditions set out in SYSC 8.1.8 must be fulfilled (see pack)

Craigcrook Management Services


Mifid18

MiFID

  • Record Keeping

  • Documents to be retained for a minimum of 5 years

  • Little change here

  • Taped Telephone Conversations to be retained for 1 year

Craigcrook Management Services


Mifid19

MiFID

  • Conflicts of Interest

  • A recurring theme in MiFID

  • Of huge interest to FSA

  • Refer to “Dear CEO” Letters of November 2005

  • Applies to all categories of clients

  • Disclosure is no longer the default position

Craigcrook Management Services


Mifid20

MiFID

  • Conflicts of Interest

  • Firm must have a written Conflicts policy

  • Firms to identify potential conflicts and how these are to be managed

  • Also applies to Conflicts that employees might have or cause the firm to have

  • Firm should create appropriate procedures to manage Conflicts

Craigcrook Management Services


Mifid21

MiFID

  • Conflicts of Interest

  • Examples when Disclosure not an appropriate measure:

  • Firms trades as a principal and has advisory or discretionary clients;

  • Firm is advising an issuer and has advisory or discretionary clients interested in investing in the offer;

Craigcrook Management Services


Mifid22

MiFID

  • Conflicts of Interest

  • Firms clients have competing interests;

  • Conflicts affecting retail clients

  • Disclosure appropriate only in limited circumstances affecting professional clients

  • When a firm is a member of a Group the interests of other parts of the Group need to be considered

Craigcrook Management Services


Mifid23

MiFID

  • Conclusion

  • Increased documentation and procedures

  • Greater responsibilities for Senior Managers

  • Greater Responsibility for Compliance Officer and Internal Auditor

  • Mostly revised policies but some IT implications

  • Especially the need for greater MI

Craigcrook Management Services


Mifid24

MiFID

William Macdonald

Managing Director

Craigcrook Management Services

198 Craigcrook Road, Edinburgh

Tel:0131-312-7501Mobile:07889-534743

Email: [email protected]

Craigcrook Management Services


  • Login