Posts tagged Risk Management
APRA, risk and ‘boiling frogs’

Smarter Compliance. In May 2019, APRA released an Information Paper reporting on the results of self-assessments performed by 36 financial institutions. Focusing on governance, accountability and culture, the responses indicated that CBA is not an outlier and that the issues that exposed them to public and regulatory criticism, are also present in their competitors and peers. Perhaps, the only differences are time and orders of magnitude. This article references the report and offers suggestions to those Licensees hoping to improve their culture, governance and compliance framework.

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The lure of technology: Limits, practices and reality.

Smarter compliance. For those of us interested in the future of advice (and the far smaller number of us interested in compliance), technology - and, specifically, in regulatory technology (“reg-tech) - is particularly appealing. Well-designed solutions, customised and properly supported, can make advisers and licensees both more efficient and more effective. Better yet, the proper technology can be a source of competitive advantage in a highly regulated industry. This article looks at alternative views, offers seven questions to consider and reminds us that, if we make the wrong calls, technology can be “a good servant but a bad master”

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An argument for unification: why risk and compliance should be joined

Smarter Compliance. For all their obvious similarities, Compliance and Risk Management are two management disciplines demarcated, fundamentally, by arbitrary distinctions, assumptions and biases. As appealing as the status quo may be to existing players, the Banking Royal Commission has highlighted the desperate need for licensees to take compliance and risk management seriously and build effective and efficient functions. The best approach might be to combine them . This article examines the obstacles in the way of a building an effective CGRM function and the reasons to do so quickly.

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Reasonable Steps: Licensee obligations and regulatory risk management

Smarter compliance. Section 912A(1)(a) of the Corporations Act requires a financial services licensee to “do all things necessary to ensure that the financial services covered by the licence are provided efficiently, honestly and fairly”. As we’ve seen from the Banking Royal Commission, this is neither verbiage nor aspirational sentiment but a compendious expectation that requires consistent and demonstrable competence, capability, efficiency and integrity. It’s also an obligation that the law expects to apply equally to the Licensee and their representatives. This article moves from the specific case of ASIC v Financial Circle to the reasonable compliance arrangements expected of licensees.

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September Update: Connections, Conduct and Coding

Smarter compliance. We live in interesting times. While many participants are intimidated by the Royal Commission and ASIC’s Report 594, we just kept coding to ensure that OpenAFSL continues to deliver on its promise. We crushed it in September. The full list of tweaks, enhancements and innovations would overwhelm you but, in this article, we’ll cover some of the main ones.

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Building in 'best interests' and better supervision

Since 2012, the Industry struggled first to understand, and then to operationalise, the 'best interest' duty. While the majority of Licensees eventually embraced this fundamental new duty, some participants failed spectacularly. In a previous article we suggested that competent AFSL should review their compliance arrangements in the wake of ASIC v NSG and ASIC v WRM. This article addresses where to start.

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