The benefit of a financial services business having a robust approach to Compliance Monitoring include, being able to demonstrate the Board’s oversight of the effectiveness of controls implemented to mitigate Compliance Risk leading to the proactive identification of control weaknesses, incidents and breaches of relevant legislation and regulatory requirements. Effective Compliance Monitoring creates opportunities for business improvements to reduce risk of legal or regulatory sanctions, material financial loss or damage to reputation. The JFSC has publicly stated in its guidance note on the subject of compliance monitoring that it will look more favourably upon material breaches self-identified by the financial services business and reported to the JFSC rather than uncovered at the instigation of the regulator. This is because it demonstrates effective governance by a registered person and enables the registered person to also report the remedial action taken and/or plan to address the issue.
The JFSC has announced that Compliance Monitoring will continue to be a key area of focus for its examination teams and it is very clear from the content of the Regulators public comments that businesses continue to find integrating effective compliance monitoring very challenging.
Baker Regulatory Services can assist businesses in developing effective Compliance Monitoring and, where necessary, Remediation Plans.