On March 29, the UK Financial Services Authority (FSA) published its findings following a thematic review of anti-bribery and corruption systems and controls in investment banks.
The FSA reported that, despite long-standing regulatory requirements to mitigate financial crime risk, the majority of firms in its sample did not have robust anti-bribery systems and controls in place and firms the subject of the thematic review fell short of FSA regulatory requirements. Weaknesses related in particular to: 1) a limited understanding of the applicable legal and regulatory regimes; 2) incomplete or inadequate bribery and corruption risk assessments; 3) a lack of senior management oversight; and 4) a failure to monitor the effective implementation of, and compliance with, anti-bribery and corruption policies and procedures.
As a result of the thematic review findings, the FSA has published Guidance Consultation GC12/5 (Proposed Guidance on Anti-Bribery and Corruption Systems and Controls) setting out proposed amendments to the financial crime guide section of the FSA rules (FC).
The FSA proposes to update Chapters 2 and 6 of Part 1 of FC with new guidance and examples of good and poor practices drawn from the findings of its thematic review. It also proposes to include a new Chapter 13 in Part 2 of FC, which will consolidate examples of both good and poor practice highlighted in the report. The proposed new guidance will not only apply to investment banks but to all firms that fall within the scope of the FSA’s financial crime requirements.
The comment period for GC12/5 ends on April 29.
The FSA has indicated that it is considering whether further regulatory action is required in relation to firms found during the review to have fallen short of current requirements.