Hasan Saeed ACSI

❗ Supervisors continue to emphasise the key role that the robustness of banks’ counterparty credit risk (CCR) management practices plays in reducing the perceived risk stemming from NBFIs. 🏛 Banks should be looking to improve their CCR arrangements not only to contend with rising supervisory expectations, but to position themselves to weather storms better in an environment of increased funding costs, tighter financing conditions, and increased volatility. #Deloitte's EMEA Centre for Regulatory Strategy (ECRS) analysed the #PRA, #FCA, #ECB and #BCBS expectations on CCR management and identified five priority areas which feature in many of them, indicating that supervisors around the world are thinking about the risk issues along similar lines

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The Financial Conduct Authority is consulting on updating it's #financialcrime Guide in relation to sanctions, proliferation financing and transaction monitoring. https://lnkd.in/dBCWyYCW Drop me a message to chat about how you can best leverage the FCA's Financial Crime Guide to inform and enhance your framework. The following key areas of the Guide are proposed to change • Sanctions: Updates based on FCA lessons learnt from its extensive assessments of firms’ sanctions systems and controls since Russia’s invasion of Ukraine in 2022 • Proliferation Financing (PF): Weaving in PF content throughout the Guide reflecting the 2022 update to the #moneylaunderingregulations which requires firms to carry out PF Risk Assessments • Transaction Monitoring: Setting out key guidance for firms on how they can implement and monitor transaction monitoring systems and support responsible innovation and new approaches (like #AI) • Cryptoassets: Explicitly referencing that Cryptoasset businesses should consult the Guide following their inclusion in the scope of the UK Money Laundering Regulations since 2020 • Consumer Duty: The Guide should make it clear that firms should consider whether their systems and controls are proportionate and consistent with their obligations under the Consumer Duty regime. The FCA also proposes to update expired links and outdated references, and include refreshed case studies drawing from more recent enforcement cases. The consultation response deadline is 27 June. Go go go! 🏃

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🗓 UPCOMING WORKSHOP: Auditing and Assurance Activities for Effectiveness 👇 With The Wolfsberg Group releasing their 'Principles for Auditing a Financial Crime Risk Management Programme for Effectiveness under the Wolfsberg Factors', we thought it would be an excellent opportunity to look closer at how to apply these principles. Whether it’s an independent audit, model validation or BAU assurance activities, we'll explore how these principles can be applied to determine effectiveness as well as compliance. Agenda: 🔸 The three Wolfsberg factors and the associated principles for effectiveness 🔸 How to adopt these principles into a methodology framework 🔸 Thematically look at what that means for performing model validation activities for key control areas such as fraud, sanctions and transaction monitoring 🔸 How FINTRAIL can help with these activities 👉 Register now: https://lnkd.in/eDSsWVHU #fincrime #compliance #assurance #audit

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🚨 Financial Crime Guide Updates – new FCA Consultation Paper🚨 The UK’s Financial Conduct Authority is consulting on proposed changes to its Financial Crime Guide. 🗒 Why? ❌ Financial crime damages society.  ❌ It undermines market integrity. ❌ It erodes consumer confidence.  ❌ Tackling financial crime is a priority for the FCA. ❌ And tackling it requires collective effort. 🗒 The aim of the proposed changes to the Financial Crime Guide is to: ✅ enhance understanding of FCA expectations  ✅ help firms assess the adequacy of their financial crime systems and controls  ✅ help firms remedy deficiencies. 🗒 What changes are proposed? 🔴 Sanctions: ➡ Updates to reflect what the FCA and firms have learned, in relation to sanctions systems and controls, from Russia’s invasion of Ukraine in 2022. 🔴 Proliferation Financing (PF): ➡ Ensuring PF is explicitly referenced where appropriate, and to highlight a 2022 update to the MLRs which requires firms to carry out PF risk assessments. 🔴 Transaction Monitoring: ➡ Guidance for firms on how they can implement and monitor transaction monitoring systems and support responsible innovation and new approaches, e.g. AI. 🔴 Cryptoassets: ➡ Cryptoasset businesses registered under the MLRs have been subject to FCA supervision for AML purposes since June 2020. Proposal to make explicit reference that cryptoasset businesses should consult the Guide. 🔴 Consumer Duty: ➡ Updates to clarify that firms should consider whether their systems and controls are proportionate and consistent with their consumer duty obligations. 🔴 Consequential Changes: ➡ E.g. replacing expired links, outdated references to European Union rules and refreshed case studies drawing from more recent FCA enforcement notices. 🗒 Who needs to read it? ✅ all FCA financial crime supervised firms ✅ firms that FCA supervises under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs), including cryptoasset businesses ⏰ Comments by 27 June 2024. Feedback and final amended text of the Guide will be set out in a Policy Statement. I'll post a link in the comments. 🤔 Thoughts? #fca #financialcrime #cryptocurrency #MLRs #cryptoassets #consumerduty #sanctions

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🚀 Big Changes Ahead for EMIR Reporting! In December 2022, the European Securities and Markets Authority (ESMA) unveiled the guidelines and technical documentation for the EMIR Refit, also known as EMIR 3.0. This major update aims to further harmonize and standardize reporting under EMIR, enhancing systemic risk monitoring while containing costs for market participants and trade repositories. Key Highlights: 🔹 **Go-Live Dates**: April 29, 2024, in Europe and September 30, 2024, in the UK. 🔹 **Expanded Reporting Fields**: The number of fields increases from 129 to 203, with changes to existing fields and the removal of a few that had limited value. 🔹 **New Fields**: Includes details on counterparties and an "Event Type" field for clearer lifecycle event reporting. 🔹 **Universal Product Identifier (UPI)**: Complementing ISIN and CFI codes for detailed product identification. 🔹 **ISO20022 Standard**: Adopting the global standard for financial data communication, using a standardized XML structure. Trade repositories will need to adhere to new Regulatory Technical Standards (RTS) for data reconciliation and verification. This includes a phased approach to reconciling 87 fields at launch, expanding to 148 fields over two years. A notable change involves the Unique Trade Identifier (UTI) generation process, now more prescriptive to ensure clarity between counterparties. The road to implementation is challenging, requiring a substantial overhaul of current reporting systems within a tight timeline. However, these updates promise to significantly improve data quality and consistency, aiding regulators in better understanding systemic risk. How will these new regulations impact your business?

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A great summary from Nuray Yücesoy, MSc, CAMS. Traditional, legacy, rule-based systems are, indeed, less effective in an ever-evolving financial crime landscape. Banks are embracing critical AI and ML technology in the fight against Financial Crime Detection.

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The FMA has published its guide for Managed Investment Scheme (MIS) managers and their supervisors for effective liquidity risk management (LRM), following consultation. John Horner, FMA Director of Markets, Investors and Reporting, said: “Effective liquidity risk management is a fundamental capability managers need to implement, maintain and enhance. Failure to do so may breach the law. The guide is designed to assist managers and supervisors effectively manage and oversee liquidity risk. “The guide does not impose any additional burden, to the contrary, it explains how the FMA views liquidity risk management as an essential component of professional standards. In doing so, it recognises the diverse range of MIS manager businesses and funds on offer. We do not expect all managers to implement the guide word for word, but we do want firms to review their systems against the guide and tailor their LRM approach to suit their specific funds.” Read more https://lnkd.in/gpvuxe8n

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The ECB has just published its 'Guide on effective risk data aggregation and risk reporting' (https://lnkd.in/eV7FwmdE). While there is limited divergence from the July 2023 consultation paper, it does put greater emphasis on the minimum scope requirements and threatens significant sanctions for non-compliance. It's a timely reminder of the increased regulatory focus on BCBS 239 across European banks. While BCBS 239 was published over a decade ago, there remains limited traction when it comes to Board and Executive focus on Risk Data Aggregation and Risk Reporting (RDARR) capabilities. It is clear from the ECB that this 'laissez faire' attitude will no longer be tolerated as it upscales its supervisory intensity. While many banks have or had BCBS 239 programmes, aligned to their own interpretation of the Principles, it is now incumbent on senior management to take a step back and consider how they align to the seven key areas of the ECB Guide, namely: 1) The role and responsibilities of the Management Body 2) The scope of application of banks' Data Governance Framework, including the identification of in-scope reports 3) Articulation and embedding of roles and responsibilities for data governance 4) The need for enterprise-wide Integrated Data Architecture 5) Implementation of consistent data quality controls across dimensions of data quality 6) The timeliness of internal risk reporting, including capabilities around reporting in times of stress 7) The importance of well-supported implementation programmes. Many banks are currently grappling with the challenges of ESG reporting, including CSRD. It is important that a BCBS 239 lens is put over these reporting processes from day 1. The SSM has been clear that RDARR is a key priority of its supervisory work programme. The implications are clear - the regulator has stepped up its game, and banks will need to do likewise. #bcbs239 #data #datagovernance #ecb #bankingsupervision

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Standby……practical masterclass training program for financial crime investigators and aspirant investigators loading. Two-day intensive hybrid workshops to commence during 2024. Top tier financial crime investigators to share pragmatic investigation techniques and skills required for successful outcomes in criminal cases. Seats limited. Watch this space for more information. #FraudTraining #MasterClass #FinancialCrime #InvestigationTechniques #CriminalJustice #LawEnforcement

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🚨 Urgent Action Needed as Consumer Duty Deadline for Closed Books Looms 🚨 With the 31st July 2024 deadline looming, financial services firms must accelerate preparations to apply the Consumer Duty to closed products and services. The FCA has issued sector-specific “Dear CEO” letters outlining priority areas and reinforcing compliance expectations. The message is clear – firms must demonstrate good customer outcomes across their entire closed book business by 31 July. The FCA will act swiftly against non-compliance causing customer harm. 🔑Key Focus Areas: 1. Customer Data Gaps: Enhance data and cleanse records to understand outcomes and identify harm. 2. Fair Value Assessments: Ensure a reasonable relationship between price and benefits, even for legacy contracts. 3. Support for Vulnerable Customers: Identify and support vulnerable customers with tailored approaches. 4. Gone-Away Customers: Improve tracing efforts and establish clear procedures for unresponsive customers. 5. Vested Contractual Rights: Consider alternative actions to prevent customer detriment. Boards and senior management must ensure necessary steps are taken and mitigating actions are in place where full compliance isn’t yet achieved. Click here to read more an discover how Complyport can help> https://lnkd.in/eR-YquhW #ConsumerDuty #FinancialServices #Compliance #FCA #CustomerOutcomes #Complyport

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Here is my latest opinion piece on the CRO role in the 3LOD model, published today by the Financial Times' Banking Risk and Regulation. It advocates for empowering CROs with more independence and permanent seats on boards, providing them with the leverage and influence necessary to contribute to crucial strategic decisions at the board level. #CRO #3LOD #riskmanagement

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Three major regimes (CFTC, JFSA and EU EMIR) have now gone live with new regulatory reporting rules, with three more going live later this year (UK EMIR, ASIC and MAS).  With that in mind Kaizen's Teen Foo shares her tips for implementing regulatory change projects, with a particular focus on how to integrate new information to ensure you achieve regulatory compliance at go live.  https://lnkd.in/eQS8kvzr #regulatorychange #regulatoryreporting #emirrefit #asic #mas

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NEW WORKSHOP: Auditing and Assurance for Effectiveness Last month the Wolfsberg Group released their latest publication on effectiveness, publishing a paper on 'Principles for Auditing a Financial Crime Risk Management Programme for Effectiveness'. Join me, James Nurse and Greg Wlodarczyk for a discussion on how to use these principles to guide your audit or assurance programme. Whether it’s an independent audit, assurance activities or model validation, we'll explore how these principles can be applied to determine effectiveness as well as compliance. Agenda: 🔸 The Wolfsberg factors and the associated principles for effectiveness 🔸 How to adopt these principles into your audit / assurance framework 🔸 A thematic look at what that means for the key control area of transaction monitoring 🔸 How FINTRAIL can help with these activities 👉 Register now: https://lnkd.in/eDSsWVHU #fincrime #compliance #assurance #audit

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AMLP Forum UK AML/CTF & Financial Crime Seminar. It's a wrap! So what happened at the main plenary session of the 20th Annual Seminar on 25th April? The session was conducted under Chatham House rules and it was certainly worth being in the room or virtually online as the insights were informative, valuable and a refreshingly open. With 200+ in the room and 180 online this was certainly a popular event and am sure that all attendees would agree the insights provided have an lens into the here and now as well as what the future holds. What I can share is broad themes that came up during the day. The whole day was certainly fast and furious - in a good way. A great selection of presentations and panels including not just the public and private sector but also trade associations and suppliers. A truly rounded view of things. So now for the all important take aways! - data sharing, now don't yawn. Yep heared it all before. Well that was before the Economic Crime and Corporate Transparency Act and it's younger sibling Data Protection and Digital Information. Game changers they certainly are. If you don't know what these deliver and you are in the UK it's time to read up and get involved. - the Online Fraud Charter obligations had a 6 month timeline. That leads us to the end of next month. Certainly some changes and positive engagement from theTech and Telco sector but does it deliver against the intent of the Charter. More to follow. - review of Fraud Act and particularly penalties is underway. Is the sentencing and incentives set in the original act appropriate in 2024? - 80% of fraud is Cyber linked. Bringing Fraud and Cyber together is essential now. If you don't have interaction between those teams you should. - need to turn police response to fraud on its head. It's started but more to happen. - follow the money, develop intelligence to tackle the crimes not just inform. - de risking and financial inclusion will remain a focus. - 4 key focus areas data and technology, true collaboration, customer awareness and metrics / outcomes. - balancing Consumer Duty and Economic Crime is not easy but need to focus and ensure fair customer outcomes. - sanctions evasion needs to be a focus of Risk Based Approach. How do you identify and act? - evasion and circumvention will be a focus in H2 and into 2025. It's here and now and needs to be tackled. Ignore it at your peril. - Companies House reform is now in place. It's already delivering value and making a difference. Is there more to do? Of course but the powers are here now and the step change has started. - mules, mules, mules. Be aware of what's on your book and ensure you know. Don't wait until October 2024 to start to get your house in order. - victim reparation of money is on the rise. Those impacted where the perpetrator is know now have the better opportunity to get recompense. So much more but hopefully gives a flavour. #economiccrime #financialcrime #scams

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Covering the exposed: The effects of the FCA’s PEP review on financial compliance This month, the Financial Conduct Authority (FCA) will release its review on the treatment of politically exposed persons (PEPs), as required by the Financial Services and Markets Act 2023. Financial firms must enhance due diligence for PEPs, who are at higher risk for corruption. The review highlights the need for financial institutions to balance strict compliance with fair access to services, utilizing advanced technology for effective PEP management amidst an evolving regulatory environment. Read more 👇 https://okt.to/dG8g2N #Fintech #financial #technology #compliance

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