Governance

The FSA systems and controls rules are probably the most significant rules that need to be considered. European governance initiatives include The Capital Requirements Directive and The Markets in Financial Instruments Directive. These are set out in the SYSC part of the FSA Handbook. There is a new BCOB (Banking Conduct of Business Sourcebook) and updated PSR (Payment Services Regulations). New prudential source books GENPRU, BIPRU, INSPRU and their derivatives also have requirements which affect governance. Individual capital adequacy assessment process (ICAAP) and ICAS must also be adhered to. These requirements interact in a complex way (as noted by none other than the FSA).

AML

HMT made some new Money Laundering Regulations in 2007. These apply to financial institutions and require firms to have effective procedures in place to detect and prevent money laundering. Specific obligations to combat terrorist financing were set out in the Terrorism Act 2000. Requirements include: appropriate systems and controls for knowing your customer, reporting and training and a nominated officer and Money Laundering Reporting Officer.

Conduct of Business

The FSA Conduct of Business Standards rules are continually evolving to address risks to consumers and /or market confidence. Major influences on the COB Standards Sourcebook are the Markets in Financial Instruments Directive and the FSA’s rewrite of COB Standards in 2006 following a ‘searching review’ of COB rules. COB covers the selling process which includes: financial promotion, advising and selling, disclosure, reporting to customers, dealing and managing, claims handling, client assets, collective schemes and trustee and depository activities.

Market Conduct

The Financial Services and Markets Act 2000 gave the FSA powers to protect the integrity of the UK's financial markets by creating a new regime to tackle market abuse. Market abuse includes: insider dealing, misuse of information, manipulating transactions and misleading behaviour. Companies are required to have processes and appointed officers in place to identify and prevent market abuse.

We at Spearhead, are able to build on existing governance arrangements to achieve compliance with all these various initiatives. The key to our success in this area is our integrated approach which delivers cost-effective compliance.