SFC Compliance Forum 2019: the SFC outlines its key supervisory priorities for the year ahead

The Securities and Futures Commission (SFC) held its third annual Compliance Forum (Forum) on 17 June 2019 – a series of six panel discussions with industry participants:

  1. Morning plenary panel: Digital journey of client onboarding, act on red flags of improper client activities
  2. Morning breakout session 1: Vaccines of client protection – internal controls and supervision of account executives
  3. Morning breakout session 2: Securities margin financing
  4. Afternoon plenary panel: Governance framework as a driving force for a culture of accountability and behavioural change
  5. Afternoon breakout session 1: Gearing up for distribution of investment products in an evolving world
  6. Afternoon breakout session 2: Regulatory obligation and risk management function of prime brokerage in Hong Kong as Asia’s hub

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Cryptoassets – what should the second line of defence be focussing on?

First published on Thomson Reuters Regulatory Intelligence on 12 June 2019 (this version includes updates as at 28 June 2019).

In our first article on cryptoassets we discussed considerations for boards and senior management. This second article considers regulatory risks specific to cryptoassets which the second line of defence (i.e. compliance and risk functions) within the three lines of defence (TLOD) model of compliance should consider.

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The month ahead in financial services regulatory developments…

In this blog post, we round-up forthcoming developments in the UK and at EU and International levels in financial services regulation for June 2019.

3 Jun
5 Jun
8-9 Jun
  • G20 ministerial meetings:
    • finance ministers and central bank governors (Fukuoka, Japan)
    • trade and digital economy (Tsubuka, Japan)
10 Jun
11 Jun
12 Jun
13-14 Jun
14 Jun
15-16 Jun
19-20 Jun
20-21 Jun
21 Jun
26 Jun
27 Jun
28-29 Jun
29 Jun
  • Deadline for responses to the European Securities and Markets Authority (ESMA) CP on ELTIF RTS
By 30 Jun
End Jun
Jun
Jun/Jul
Jun-Aug

Updated DOJ Guidance Steers Effective Compliance and Remediation Programmes

Authors: Kyle Wombolt, Jeremy Birch and Charlotte Benton

The US Department of Justice Criminal Division (DOJ) has issued updated guidance on the Evaluation of Corporate Compliance Programs (guidance). Under the guidance, DOJ prosecutors evaluate the effectiveness of a company’s compliance programme when conducting an investigation, determining whether to bring charges or negotiating plea or other arrangements.

“Whether in the US, Asia Pacific or elsewhere, the guidance sets out useful prompts for a best practice compliance framework” observes Hong Kong corporate crime and investigations partner, Jeremy Birch. “Given the propensity of regulators to borrow from each other’s procedures and practices, it will also be of interest to companies subject to regulatory scrutiny, investigation or enforcement outside the US, as a benchmark for appropriate remediation and resolution.”

The guidance covers many of the same areas as the previous version, providing additional context to the multifactor analysis of a compliance programme.

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OFAC Emphasizes Importance of Risk-Based Sanctions Compliance Programs for US and International Companies

Authors: John O’Donnell, Jonathan Cross, Geng Li, Christopher Milazzo, Susannah Cogman and Daniel Hudson

Further emphasizing its expectation that all companies whose business touches on the United States should maintain a robust, risk-based US economic sanctions compliance program (“SCP”), the US Treasury’s Office of Foreign Assets Control (“OFAC”) has published a detailed “Framework for OFAC Compliance Commitments” (the “Framework”) setting forth the key components of an adequate SCP. OFAC’s release of the Framework heightens the need for US and international companies to review their existing policies, procedures and controls relating to sanctions compliance, and to make appropriate changes to update relevant policies in line with OFAC’s guidance. As the number and scale of US sanctions enforcement actions increase, maintaining an effective SCP is an essential tool for managing sanctions risk; conversely, the Framework makes clear that the absence of an adequate SCP will be viewed negatively by OFAC pursuant to its Economic Sanctions Enforcement Guidelines.

The Framework includes a discussion of the typical “root causes” of sanctions violations leading to OFAC enforcement action; in most cases, SCP deficiencies are key elements in these examples. Thus, all companies whose business directly or indirectly involves the US or US persons should review their SCP carefully in consideration of these identified root causes.

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Corporate Crime Update – Winter 2019

Welcome to the Winter 2019 edition of our corporate crime update – our round up of developments in relation to corruption, money laundering, fraud, sanctions and related matters. Our update now covers a number of jurisdictions.

For the full update on each jurisdiction, please click on the name of the jurisdiction below. Below we provide a brief overview of what is covered in each update.

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Whistleblower reform in Australia – new legislation enacted

Whistleblower reform is underway in Australia after the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017 (Bill) was passed on 19 February 2019.

The new law is likely to commence on 1 July 2019, assuming Royal Assent is given by 1 April 2019.  If this occurs, the obligation for public companies to have a compliant whistleblower policy will apply from 1 January 2020 (potentially later for large proprietary companies).

In this briefing, our Australian team explain a number of the key changes that the new law will introduce and the considerations that organisations should be thinking about in terms of implementing these changes in their businesses, or considering if existing global processes are compliant.  There have been a number of changes to the new law since the initial Bill was first read in December 2017 so, even if organisations have previously considered the new law in one of its former iterations, the final version now needs to be assessed.

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