Regulatory update: “Self certification” – an answer to a compliance officer’s prayers?

21st January 2013

Exploring institution-wide “Self certification” to address regulatory demands – could it be the answer to a compliance officer’s prayers?

The Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) CAME into force on 1st April 2013.

Created in response to identified flaws and weaknesses in the working relationship between HM Treasury, the Bank of England and the Financial Services Authority at the height of the financial crisis, the PRA’s remit is to promote the safety and soundness of firms through a far more judgemental and forward-looking approach to supervision.  The Bank of England and FSA admit, however, that there may be times when the PRA’s judgement will be at variance with that of the firm and furthermore, there will be occasions when events will show that its judgement, in hindsight, was wrong.  The FCA, on the other hand, will seek to ensure that relevant markets work well, this objective being underpinned by three key operational objectives: the integrity of the market; consumer protection; and competition.

This webinar will look at how the PRA’s  approach to supervision will impact firms, and how it will change the role of the compliance manager and team.

  • How will under-resourced compliance departments handle the change?
  • What type of solution is required to meet the new demands?

David Wilford, Director of Compliance Products at Lombard Risk, who has significant experience of regulatory compliance in financial services institutions, will look at the changing regulatory landscape, and review how a tool to CONTROL, MONITOR and REPORT on the state of compliance of a firm, will assist compliance managers.  Such a solution would have to:

  • Detail all applicable regulations …nothing missed
  • Capture state of compliance and action taken to address deficiencies
  • Ensure evidential documentation is easily retrievable, saving time and money in evidencing compliance
  • Ensure at least two people are involved in the assessment / approval process
  • Engage senior management and executives with regard to assessment of high risk regulations
  • Provide high and low level comprehensive information so everyone may be kept informed … subject to security clearance
  • Help to alleviate pressure from above … with all information available on a dashboard
  • Built in tolerances and alerts to focus attention on areas of concern
  • Scheduling system to ensure that timely action is taken.

We shall be looking at how this type of solution will enable compliance teams to respond to the new regulatory world.

Register above to join this webinar: copies of the presentation will be made available to registering delegates.

Excerpt from the The Bank of England, Prudential Regulation Authority: Our approach to banking supervision

Delivering the PRA’s approach The PRA’s proposed approach has, at its centre, supervisors making judgements, when needed, about current and future risks to an institution’s safety and soundness and about the action it should take to address these risks. It is recognised that this will mean that, at times, the supervisor’s judgement will be at variance with that of the institution. Furthermore, there will be occasions when events will show that the supervisor’s judgement, in hindsight, was wrong. This is inherent in a forward-looking system. The PRA will ensure that major judgements involve its most senior and experienced individuals, using a process which is both rigorous and  well-documented.

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