Category Archives: Independent Financial Adviser

Regulatory Complaint Handling & The FCA

Regulatory Complaint Handling & The FCA

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The FCA’s complaint handling requirements and the Financial Ombudsman Service (FOS)

The FOS is an independent adjudicator of consumer complaints linked to the supply of finance.
Firms must have their own internal complaints handling procedures and comply with rules (set out in the DISP chapter of the FCA Handbook) which set out timescales within which responses to complaints must be given to customers. The firm must have an adequate regulatory complaints policy and procedures as well as effective means of recording their categories and responses in a compliant way.
If, at the end of a firms internal complaints-handling process (generally eight weeks), the customer remains dissatisfied, they have the right to refer the complaint to the FOS for adjudication and resolution. FOS’s decision is not binding on customers, who remain free to pursue their complaint in the courts if they wish: the decisions are however binding on firms and FOS can order firms to take corrective action and where appropriate pay redress up to £350,000.
This was increased from £150,000 on 1st April 2019. The increase only applies to complaints referred after 1st April 2019. For complaints referred after 1st April 2019 about earlier complaints, the limit increased from £150,000 to £160,000.

If you need to create, review or execute your Governance. Risk or Compliance strategy, call us today on

0207 097 1434 or email info@complianceconsultant.org.

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This guide is only an aide memoire and intended for information only for anyone appraising the documentation needed in an audit/compliance check. It is not to be considered as direct advice or intended to replace specific 1 to 1 engagement with your compliance and risk professional.

UK Financial Services Compliance ‘Premium Access Retainer Service’

 

We offer a Premium Access Retainer Service

Providing Your Firm With Fast, Accurate, Experience Based Quality Answers So You Can Move Ahead With Your Business Efficiently and Profitably.

We have a bespoke service starting from £600 pm.

Our Full Services Obviously Has The Following 11 Benefits;

  1. You will get a response within 3 hours by phone or email/text.

  2. From PBR, S165 or S166 (we were appointed as skilled persons in 2012), we will advise and make recommendations regarding what is required.

  3. Your issues take priority over other work whilst we respond to your query; additional research or further work that may be required will be quoted on.

  4. Products like our best-selling Compliance Manual/AML Policy & Procedures are provided at a heavy discount typically around 40%.

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  6. Normal service is mainstream hours Monday to Friday but weekends and evenings are ad-hoc, although we often can be found working into the night or across the weekends at some point. Holidays excepted, but happy to take emergency calls.

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  8. We work on a first come, first served basis, so anyone paying ‘Premium Retainer’ for the longer time, gets priority over the other Premium Retainer clients – if push comes to shove and we are snowed under.

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Monthly cost = £1,150 subject to firm size of less than 20 staff inc directors/partners.

    Ongoing Obligations for FCA Authorised Investment Firms

    So What Are The Ongoing Requirements After FCA Authorisation?

    There are a number of areas that firms should pay attention to and be accurate in the monitoring and reporting of post FCA Authorisation or Registration. The video below explains generic requirements but you need to discuss your specific issues with us, Compliance Consultant, on 0207 097 1434.

    What Does A Regulatory Business Plan Need To Say?

    A Regulatory Business Plan (RPB) Is Your Showcase To Demonstrate Understanding & Forethought.

    The RBP should demonstrate that the targets set by the candidate are realistic, as well as financially and operationally manageable.

    Some fundamental questions that the RBP must answer

    Why you? The RBP could create a poor impression if it does not describe to the regulator its intended market and comparative advantage: whether it would offer something new to the market and the elements of its services/products that would make them stand out from their competitors.

    Answer this – “why are you best positioned to offer and deliver on this proposition?”

    You against the others: A competitive idea and promising business case is backed up with research and facts. This is a challenging part of the project; the candidate’s RBP must demonstrate that there is a market for their products and services, and also be aware of the competition and their expected share in the market.

    Vitally, the RBP must also demonstrate its understanding of the dynamics of the specific market and how the proposed business will meet customer needs.

    Known unknowns: Here, the question is how candidates will approach the problem of partial or unavailable information. Some RBPs are extremely ambitious about their target markets and customers; some others are optimistic as to the costs of running a business, especially operational costs and this may lead to expected costs being presented in a superficial manner in the RBP.

    All projections and estimates must be backed by thorough and trustworthy market research or accurate business information.

    From a regulator’s perspective, stating all the possible expenses and potential financial needs in the RBP provides a useful starting point into assessing business model viability. It also demonstrates that the applicant has a sound grasp of its figures and market.

    A start-up may not have all the information to-hand on day-one when it meets the regulator, but it should have reasonable estimates and a plan of the timeline and actions to get this information and must integrate it into the plan before submitting it.

    New entrants will have to describe in their plan how they will comply with complex prudential and conduct regulations. This is not easy, even the UK’s most established institutions have got themselves into significant difficulties due to regulatory breaches.

    We provide all FCA Authorisation applicants with a template business plan with not only headings, but additionally pointers and ideas of what needs to be involved.

    Ask us for details – complete the form below.




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    Professional FCA Authorisations, Registrations & Licencing https://www.complianceconsultant.org/fca-authorisations-registrations-licencing/

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    KYC and AML – Suitable for all firms with AML responsibilities

    The UK is one of the world’s largest and most open economies, whose strength is based on substantial and productive relationships around the world. Government Ministers have the responsibility for national security and financial services, so they want the UK to remain to be an appealing country for legitimate business and a leading global financial centre. But they also recognise that the UK’s openness and position as a global financial centre exposes it to the risk of illicit financial flows.

    Money laundering and terrorist financing are important threats. Recent terrorist attacks in London, Manchester and elsewhere highlight the value of the fight to deprive terrorists of the resources they need. Serious and organised crime has been estimated to cost the UK tens of billions of pounds yearly. That is why we must continue to squeeze out dirty money, strengthening the UK’s security and prosperity as well as that of our partners overseas.

    What makes Our Course Different?

    • We have been delivering KYC training for over 12 years and are proud to have been chosen by some of the world’s leading banks.
    • Your course director is an expert on the subject, has over 30years’ experience in the industry and has delivered highly successful programmes to financial services firms at all levels; from small partnerships, to medium sized firms and global giants
    • The course is packed full of interesting points and actual case studies making it highly engaging and very relevant
    • Our feedback from past delegates has always been excellent

    Objectivesaml template fca mlr2017

    • Understand fully the requirements of MLR2017
    • Understand that good enough, seldom is
    • Appreciate that this is mandatory, not optional
    • Recognise the importance of a risk assessment
    • Recognise the critical role of a risk based approach
    • Be able to put in place a framework meet the regulatory requirements fully
    • Recognise that AML is a holistic process and needs to be embedded into culture and form part of doing business as usual
    • Recognise and be able to deal with the challenges of implementing an effective system

    Content

    • Introduction – What is Money Laundering
    • Placement, Layering, Integration
    • How does this work in practice
    • The scale of the problem

    Establishing a KYC framework

    • What should instittions have in place
    • Money Laundering Regulations 2017
    • Changes
    • General risk assessment
    • Risk mitigation policies
    • Level of due diligence
    • Reliance on third parties
    • PEPs
    • New Criminal Offence
    • Office for Professional Body Anti-Money Laundering Supervision (OPBAS)

    What is KYC & CDD

    • Initial Risk Assessmnet
    • Risk based approach & Methodology
    • Risk driven controls
    • Material triggers
    • The customer lifecycle

    The CDD process smcr project plan regulation buy now how do

    • KYC – getting to know the customer
    • IDV – checking what they say
    • SDD? Is it really viable?
    • EDD – more comprehensive client knowlede and due diligence
    • Ultimate Beneficial Ownership
    • Source of Wealth
    • Source of Funds
    • Regular review process

    Remediation process – introducing new rules and requirements for the first time

    • How  Should CDD or EDD be applied
    • Using a risk based approach onlyl
    • How do we allocate the risk category
    • A typical Risk Assessment Methodology
    • Using the RAM in practice
    • The three plus two lines of defence model

    Who needs to be subjected to KYC?

    • Onboarding and Review procedures
    • Using technology – a must for large volumes
    • Swim lines
    • Expetion report and alerts
    • The role of the second line of defence
    • The role of internal audit

    Essential Elements of KYC Standards

    • Clear and user friendly procedures and guidelines
    • Customer acceptance policy
    • Customer identification policy
    • Guidelines for opening accounts
    • KYC for existing accounts – called “remediation” and needs to be managed well

    Politically Exposed Persons

    • Definition – formal
    • Definition in practice
    • Why are they a special case
    • Mandatory high risk
    • UBO issues
    • Source of Wealth issues
    • Annual Review issues

    Specific Identification & Verification Issues

    • Trust nominee and fiduciary accounts
    • Corporate vehicles
    • Complex Structures
    • Introduced business
    • Client accounts opened by professional intermediaries
    • Non face to face customers
    • Offshore accounts

    Constructing the KYC Framework

    • Policies
    • Roles and Responsibilities
    • Senior Management and M.I. requirements
    • The MLRO (or equivalent) challenge!
    • Risk Assessments and Procedures

    Implementing and Managing the Total KYC

    • Escalation
    • SAR’s & Whistleblowing
    • Due diligence (on-going)
    • Record keeping
    • Training
    • Monitoring
    • Reporting

    Challenges with KYC & How To Control It

    • Staff & Client resistance
    • Embedding as part of the culture
    • Prevention & detection
    • Early warning systems
    • Controls, KPI & KRI

    Course Summary, Open Forum, Close

    Background of the Trainer

    Course Director

    Lee has worked with a range of organisations from smal start-ups through to FTSE100 companies, including foreign banks and institutions, many that have had difficulties identifying and managing compliance risk, and helped them develop effective, robust systems. He has adapted his experience to develop this course and supporting materials with the practical skills based focus. Lee’s skills, qualifications and experience make him ideal for supporting anyone wishing to develop top-class knowledge in the management of Anti-Money Laundering and Counter Terrorist Financing.

    Course Summary

    This is a highly interactive, user friendly and comprehensive workshop for both banks and other regulated institutions and practitioners alike. It covers the KYC procedures and systems that all regulated institutions must have in place and deals with the full range of clients from straightforward retail, to higher risk clients (including PEPs) and clients who use complex structures.

    Who Should Attend

    1. Financial Institutions regulated by the FCA including those falling under EMI, PSD and MIFID.
    2. Anyone who onboards new clients for financial transactions as described under the MLR 2017.
    3. Anyone with an interest in the subject especially “Relevant persons” under the UK MLR 2017, i.e. Estate Agents etc, as below
    • Where previously only holders of a casino operating licence were covered by the regulations, they now pertain to all gambling providers
    • Trustees now have greater obligations in relation to revealing the beneficiaries of trusts
    • Those engaging in financial activity on ‘an occasional or very limited basis’ are not covered by the regulations. ‘Occasional or very limited’ is defined as:
      • annual turnover from financial activity of less than £100,000 (this figure was previously £64,000)
      • activity limited to transactions not exceeding EUR 1000 per customer
      • financial activity ancillary to a larger business
      • financial activity not more than 5% of the total turnover of the larger business
      • financial activity only offered to customers of the main business
    Knowledge Pre-requisites
    None required
    from £250 pp – Minimum 5 persons

    Format

    • Duration is as a full day classroom workshop – Your Venue or we can arrange local venue at additional cost.
    • Attendees can also purchase our AML & CTF Policy & Procedures Document at 50% discount

    Call us on 0207 097 1434

    Or complete the form below

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    Advisers Miss the new PROD Rules – Quoted Post

    Senior Managers Regime 2018, senior managers regime summary

    Just 5% of advisers aware of PROD obligations – IRESS

    70% unsure if they can fully comply

    Mark Loosmore: “Advisers need to take notice of PROD. It is no longer guidance – it is rules based now.”

    Just one-in-20 (5%) advisers are aware of their obligations under the FCA’s ‘PROD’ product governance rules, which were introduced alongside MiFID II in January, research by IRESS has suggested.

    The study, undertaken by consultancy the lang cat on behalf of the technology solutions business, also revealed more than half of the 64 advisers polled were still unaware of PROD – the Financial Conduct Authority’s (FCA) term for its product governance and product intervention sourcebook.

    Furthermore, the study found almost three-quarters (70%) of advisers to be unsure if they were able to evidence the suitability of product services by client segment, while one-third (33%) use back- office technology to help segment clients.

    “The new rules in PROD have caught many people in the industry unaware,” said IRESS executive general manager (wealth) Mark Loosmore. “There seems to be widespread confusion and concern around the steps advisers should be taking to ensure client suitability processes are evidenced appropriately.

    If you need assistance with this area of regulation, Compliance Consultant are available – just call us today on

    0207 097 1434

    or download our introductory brochure HERE

     

     

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    Making Compliance Work: New FCA SMCR Directory Consultation

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    approved persons regime and senior managers regime 2018

    Current Situation

    Following the extension of the Senior Managers Regime 2018 (SMCR), the change from the FCA Approved Persons Regimes (APER), the number of individuals on the Financial Services Register (“FCA Register”) will drastically reduce, as only specified Senior Manager roles at FSMA firms will be required to be approved by the FCA and appear on the Register. Firms will in future, be in charge of certifying the suitability, skills, fitness and propriety of their own people to the FCA.

    Throughout the consultation process for the SMCR extension, a variety of firms expressed issues about the absence of an FCA register for those individuals who are no longer required to be approved by the FCA (and in connection with whom there would be no FCA mark of approval). In response to these worries, the FCA is proposing a new Directory of facts to be supplied by firms. However, the FCA has not reversed the fundamental concept that it is no longer required to grant approval.

    On 4th July 2018, the FCA released their “near final rules” and their senior managers regime guide as well as the consultation for the new “Directory”

    Whether the Directory meets those issues is a question for the consultation process, do firms think that this Directory will have any value to the market?gdpr uk financial services fca

    The FCA believes the improved visibility of firms and individuals would:

    • assist consumers to locate appropriate advisers or check the qualifications and conduct history of their existing adviser, thus increasing competition and improving consumer protection
    • allow firms to determine the suitability of counterparties, and
    • aid the FCA with monitoring and enforcement activities, making it more difficult for unsuitable individuals to operate in the UK financial market.

    What do the FCA propose?

    The FCA proposes to introduce the Directory: a new public register and user interface that will make details public on additional individuals conducting a wider variety of roles (including Certification staff, non-Senior Manager Function Directors (executive and non-executive) and those who the FCA does not approve, for example, financial advisers, pensions and mortgage advisers, traders, portfolio managers and additional managers), and also presenting information on the Senior Managers that the FCA continues to approve.

    The Directory would include information such as:

    • Workplace location: list of individuals active in specific areas
    • Qualifications: list of individuals who hold appropriate qualifications e.g. to provide financial or pensions advice
    • Regulatory sanctions and prohibitions: facility to check which individuals are prohibited by the FCA and PRA or have limits on any activities they are authorised to undertake

    What do you need to do?

    • Provide insightful feedback: The deadline is 5th October 2018 to provide the FCA with feedback on this proposal. The FCA aims to publish final rules in the winter. Final system testing would then occur before the FCA would accept notifications from firms.
      If the FCA introduces the Directory:
    • Provide relevant information: firms would have to provide the FCA with the information detailed above on all Directory Persons who work on their account, by the end of an individual’s first business day performing a relevant role. For existing staff, firms would have until completion of the SMCR transition period to certify relevant employees and report to the FCA accordingly.
    • Update of information: firms would be accountable for the timely and accurate reporting of this particular information on an ongoing basis (with a ₤250 administrative fee for late or inaccurate data; effectively a fine).

    important please read

    Compliance Consultant specialise in UK Regulatory Financial Services Governance and can assist your firm in the preparations for the SM&CR. Just search Google for “Compliance Consultants, London” and look for our tag on Google Maps (we’re usually #1).

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    When Engaging Consultants, Two Of The Major Expenses Are Idle Staff and Premises

    Most Consultancies have staff that are “Off-Project”, often for 25-30% of the year; but their salaries still need to be paid.

    Additionally, those prestigious, air conditioned offices with their staff and free coffee and biscuits all need to accounted for and guess what ……. 

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    Also, you may not be aware that smaller consultancies are “white labeling” their services for the bigger firms when the larger firms don’t have the right expertise “in-house”.

    We don’t have expensive offices, or idle staff. We use qualified and experienced consultants that are constantly busy or engaged on new training. 

    We don’t have senior and middle managers to pay city salaries to, we just focus on the project, the project needs and variances and will never bus in a load of baby grads to create pretty presentations. 

     

    When you need help or support in reviewing your compliance policies and procedures, or working to a fixed budget;

    We Guarantee To Beat Any Like For Like Quote By At Least 5%

    Just call 0207 097 1434 or email melissa@complianceconsultant.org

    to arrange your next discussion.


    If you are looking for FCA authorisation consultants, specialist regulatory compliance risk, AML specialists or any FCA compliance services, then Compliance Consultant can arrange a plan tailored for you. Often at a fixed rate. Ask Us For Information Using The Above Contact Details.

     

     

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    GDPR and Financial Advisers: Establishing the right processes

    compliance-consultant-ifa-suitability-check-how to check suitability

    The key point to processing personal data with GDPR on individuals is it must be justifiable to do so.

    There will need to be controls in position, part of GDPR’s central tenet of ‘privacy by design’ is to justify the use of the personal data and to process it as necessary.

    Subject access requests must be abided by, so it is imperative to draw up how these will be done. In theory, they are not too challenging but engaging an independent firm to ensure that you have the right procedures in position ahead of time will ensure the correct personal data is provided to the requesting data subject in a timely fashion.

    If there is no justification for processing the personal data, then it should be deleted. Firms will should carefully consider the process to enact this, since removing justifiably processed personal data, or preserving personal data that should be deleted, could bring about issues in the future. Decisions will want to be taken at a policy level to decide what embodies justifiable reasons to processing personal data, and who is responsible to take decisions if situations arise outside the normal.

    There are a variety of regulations facing UK financial advice firms at present and it is easy to see why many have reached the conclusion there is something of a regulatory overload facing the industry at present. This only renders it even more important that firms put in the time to understand what each piece of regulation means to them.

    Other than the Data Protection Act 1998 itself, the GDPR does not usurp other pieces of legislation, such as MiFID II. They do not contradict each other and the sub-clauses in each article of the GDPR lay out the caveats.

    Again, this comes back to justifiable processing of data. If data must be retained under another regulation such as MiFID II, then this need actually then justifies the processing of the personal data and, effectively, will theoretically override the need to delete the personal data under the GDPR. Making the effort to understand the nuances is extremely important and paints a much clearer picture of what firms will want to do.

    Rights Of The Individual
    It is also crucial to understand the rights of the individuals whose personal data is being processed. They have the right to request access to their personal data and the right to request that it is erased. Formulating a program to take care of their rights will offer a more effective indication of what data firms should and should not be processing.

    Not every request to be forgotten needs to be satisfied, there are circumstances under which the firm has rights to retain the personal data. Understanding where and when this applies will go a very long way to ensuring compliance with aspects relating to data retention and how you can respond to such requests for erasure.

    Finally, firms must fully understand what constitutes a breach, when that breach should be reported to the Information Commissioner’s Office and when that breach is sufficiently serious to get reported to data subjects, and when caveats apply that mean the breach may not need to be reported.

    Identifying breaches is also an essential factor. Mapping out how breaches will be handled will help to avoid panic when they do. It must be presumed that breaches will occur so advice firms need to have responses set out for all staff to understand. How will the breach be handled and subsequently categorised? What data will be reported to whom? What are the time frames? Working these things out as they happen will not be easy and an independent consultancy can help you identify your blind spots.

    Understanding the regulation and justifying processing data will prepare the backbone of a firm’s response to GDPR. Putting the correct processes in place will smooth the passage towards handling breaches and supplying the regulators, and possibly individuals, with the correct information at such times.

    Children
    For the very first time, the GDPR will introduce special protection for children’s personal data, particularly in the context of commercial internet services which includes social networking. If your organisation offers internet services (‘information society services’) to children and relies upon consent to collect information about them, then you may need a parent or guardian’s consent in order to process their personal data lawfully. The GDPR sets the age when a child can give their own consent to this processing at 16 (although this may be lowered to a minimum of 13 in the UK). If a child is younger then you will need to get consent from a person holding ‘parental responsibility’.

    This could have significant implications if your organisation offers online services to children and collects their personal data. Bear in mind that consent needs to be verifiable and that when collecting children’s data your privacy notice must be written in language that children will understand.

    Call us on 0207 097 1434

    Email info@complianceconsultant.org

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