The Guernsey Financial Services Commission (the “Commission”) have released their Thematic Review following onsite visits undertaken during late 2016 to fund managers and fund administrators, which were classified as predominantly low impact. The full report can be found at www.gfsc.gg/news
A summary has been provided below.
The Investment Supervision and Policy Division focused on the mitigation of governance and compliance risk and considered the following:
Monitoring of collective investment schemes by way of key performance indicators and overall financial performance;
Assurance on valuations of collective investment schemes’ assets; and
Management and disclosure of conflicts of interest.
It was pleasing to see within the Commission’s report that they identified “a good governance, risk and compliance culture amongst the licensees sampled”
Areas for improvement have been highlighted and include:
Board oversight of Compliance
Collective Investment Schemes – take-on and review
Collective Investment Schemes – Conflicts of Interest
The Financial Crime Supervision and Policy Division report focused on the governance, risk and compliance frameworks in place to mitigate financial crime risk. Topics included:
Business Risk Management Framework
Financial Crime Governance
Customer Risk Management Framework
The conclusion from the questionnaire sent out and on-site visits undertaken by the Commission was that “there is a culture of compliance amongst firms together with an understanding of the importance of good governance and of implementing effective but proportionate compliance arrangements to mitigate financial crime risks.”
The report included a number of points to be considered by Licensees, some of which have been listed below.
Any identified risks should be mitigated sufficiently
Overall risk appetites for the business should be set
The Business Risk Assessment should include the type of funds/assets the business is willing to administer
Compliance tests should be in place for intermediary relationships
Reporting to the Board should be effective and efficient to highlight issues arising and to remedy deficiencies
Assessment of money laundering and terrorist financing risks and other factors should be considered within take-on arrangements
Sufficient controls must be in place for ongoing monitoring of schemes and investments
Platinum Compliance are in the ideal position to assist you with ensuring your business areas meet the required regulations and to provide you with an external independent view. We can assist with reviewing your Compliance Monitoring Programmes, Compliance Reports for the Board, Business Risk Assessments and much more, to provide you and your Boards with confirmation of effectiveness or by providing recommendations, based on our extensive knowledge of the Investment industry both from an operational and a Compliance perspective. We would be happy to meet with you to discuss further.
We ran a 1 hour lunchtime CPD session on 5 December 2017 at the Guernsey Training Agency (“GTA”) on Conflicts of Interest, thank you to all of you who came along.
If you missed the CPD session, we can come into your offices and provide training on Conflicts of Interest and all aspects of Compliance, Financial Crime, enhanced MLRO training and many more subjects to suit your business needs.