Friday, 29 April 2016

New eLearning – FATCA, CASS & Transaction Reporting


It was estimated that the US Treasury lost $8bn of income tax revenue annually, due to US citizens hiding funds in offshore accounts. During President Obama’s time in office, he enacted The Foreign Account Tax Compliance Act 2010, more commonly known as FATCA. FATCA was intended to recoup those funds.

To the US, the UK is offshore. Failure to comply with the obligations can result in penalties and fines. 

Some firms choose not to hold accounts for US citizens. However, if your firm is one of those that do and you are involved in the management or day-to-day running of these accounts, you will need to:
  • understand the basic principles of FATCA - which accounts are reportable
  • recognise situations where failure to comply with FATCA may arise
  • know which penalties may be applied for lack of compliance
  • be familiar with the various terms used within FATCA and be able to explain their relevance.

The new pathway on FATCA provides learners with all of the above. 

The Basics of CASS (Client Assets Sourcebook)

In the last few years, the FCA has issued over £180 million in fines to firms over CASS issues and breaches.

Increased consumer detriment can arise when authorised firms default or leave the market. Poor records and ineffective segregation procedures for client monies create a slower, costlier and more uncertain outcome for the customer, along with associated reputational damage to the FCA and UK markets, as we saw with the most recent financial crisis.

Lack of knowledge and awareness are the biggest causes of CASS breaches – particularly during periods of change such as mergers and acquisitions.

The CASS affects all firms that have permission to hold and control client money as well as firms that are authorised to carry out activities such as safeguarding, arranging and administering assets. Adhering to CASS requirements is fundamental to ensuring client money and assets are dealt with correctly, protecting the customer, the firm and the market.

If employees are new to the role of control of client monies, or need a refresher to bring them up to date with current CASS regulatory requirements and the reasons why they need to be adhered to, this module is for them. 

Transaction Reporting

Understanding transaction reporting and the role it plays is vital in protecting the market, firms and clients from financial market abuse, insider trading and market manipulation.  It supports the statutory objectives of maintaining confidence in financial markets and reducing financial crime.  

Firms can expect enforcement action for submitting transaction reports incorrectly that may conceal potential instances of market abuse.

Common areas of non-compliance with the regulation are due to:
  • not understanding the importance of submitting transaction reports in a manner that correctly shows the transaction
  • not understanding why using transaction reports is essential as part of monitoring and surveillance of financial crime
  • not having processes for conducting internal and external reconciliations that are clear, concise and reviewed on a regular basis. 

Transaction reporting is a priority for the FCA and is a key tool in identifying potential market abuse and market surveillance to ensure the integrity of the UK financial services market. If an employee’s role involves, or is party to, submitting transaction reports, make sure they understand the part they play by having them complete this module.

New eLearning – Cybercrime & Three Lines of Defence

Even though the level of awareness of cyber threats has increased, and law enforcement acts globally to combat them, illegal profits have reached amazing figures.

The regulators require firms to establish three lines of defence supported by clear and robust processes and procedures in order to combat potential criminal activities. Cybercrime and digital attacks have increased around the world and are an ever-increasing threat to a firm’s survival.

Cyber criminals are becoming more sophisticated targeting consumers as well as public, private and government organisations.

At work, many employees wrongly believe that the organisation will provide all the protection needed, so they think they don’t need to be concerned about cyber-activity – they do.

By adopting robust policies and procedures that support the firm’s three lines of defence and understanding the part individuals play in tackling Cybercrime, we can help: 

  • prevent the loss of intellectual property and sensitive data
  • avoid the cost of mitigation strategies and recovery from cyber-attacks
  • mitigate any penalties and compensatory payments to customers (for inconvenience or consequential loss), or contractual compensation (for delays, etc.)
  • prevent the loss of reputational and brand damage.

The new modules on cybercrime and three lines of defence will help learners understand how your firm could be exposed to cybercrime and how embedding the practices of the regulators’ three lines of defence can help to mitigate that exposure.

New eLearning – Consumer Credit Handling Arrears

Your firm should have established clear and effective policies and procedures to identify how customers, particularly vulnerable customers, must be dealt with by employees when handling debt management situations.

Firms are expected to provide information, support and guidance that will allow a customer to be fully involved in any discussions on how to manage their debt/arrears and be encouraged to make an informed decision without the application of undue pressure.

Dealing correctly with vulnerable customers is a hot topic, high on the regulator’s agenda – this new module on Handling Arrears will help staff to do this and understand why it is so important for the customer, your firm and themselves.  

New eLearning – Conduct Rules

For those Senior Management Functions and individuals who fall under the Certification Regime in banks, building societies, credit unions and designated investment firms, the new Conduct Rules became applicable on the 7th March 2016.

For all other employees (apart from some ancillary staff) in those relevant firms, the new rules are not applicable until 7th March 2017. However, the regulators expect all individuals to be trained on the new Conduct Rules with specific examples aligned to the roles they undertake prior to the applicable commencement date.

The Conduct Rules module is part of our suite of eLearning that covers the Individual Accountability Regime. Whether your staff hold a SMF, are part of the Certification Regime, or do not come under the new Conduct Rules as yet, this module will be relevant to them. Because we have included a range of job role families, this module satisfies the regulators’ requirement for specific examples, pertinent to the role being undertaken.  Learners will understand what the Conduct Rules are, what they mean and how they apply to them.