3 Regulatory Training

Regulatory Training Module Objectives  Money laundering  Complaints & Compensation  Retail Distribution Review  Fit & Proper  Treating customers fairly Money Laundering Money Laundering  To prevent the use of financial systems for money laundering purposes  1989, the Financial Action Task Force on Money Laundering (FATF) was created  An international body dedicated to the fight against criminal money, 30 members including the European Commission and many of the EU member states Money laundering can be defined as ‘Terrorist property’  Money or other property that is likely to be used for terrorism purposes or proceeds of the commission of acts of terrorism  Proceeds of acts carried out for the purposes of terrorism Definitions Money Laundering can be defined as  the process of filtering the proceeds of criminal activity  through a series of accounts  or other financial products  in order to give it apparent legitimacy  or to make its origins difficult to trace Legislation Proceeds of Crime Act 2002  Deals with the laundering of the proceeds of all forms of crime - drug money is no longer separate  The Act extends the obligation to report suspicions about money laundering of proceeds of all forms of crime - previously restricted to drugs or terrorism offences Three main areas to address: - Concealment or disguise • The true nature, source, location, disposition, movement, rights with respect to or ownership of property, • knowing that such property was derived from criminal activity or from an act of participation in such activity - Acquisition, possession or use of property  Knowing, at the time of receipt, that such property was derived from criminal activity or from an act of participation in such activity - Participation in, association to commit  Attempts to commit and aiding, abetting, facilitating and counselling the commission of any of the actions mentioned Accredited Bodies The role of the accredited bodies will be to ensure all advisers maintain the required standards of behaviour and professionalism, hold appropriate qualifications and undertake the required CPD CPD Qualification “CPD should be geared to the maintenance and enhancement of competence” Under RDR rules from January 2013:  Competent advisers must complete at least 35 hours of CPD each year  CPD must contain at least 21 hours “structured” CPD described as an activity which has a defined learning outcome Defined learning outcome could include:  Seminars  Lecturers  Conferences  Courses  Workshops  Appropriate e-learning Researching products, reading newspapers and magazines is not considered to be structured learning Ethics in Practice  Open, Honest responsive and accountable  Relating to colleagues and customers fairly and with respect  Committed to acting competently, responsibly and reliably Ask yourself the questions listed Do you abide by these? Any Questions? Treating Customers Fairly Training and competence and Treating Customers Fairly (TCF)  To demonstrate that TCF is embedded into Training and Competence requirements procedures should demonstrate how competence is being maintained in areas such as: • technical knowledge • advisory skills • changes in markets, product legislation and regulation  Options include: • ensuring continuing professional development by encouraging reading of the trade press, FSA website, newsletters and attendance at roadshows and industry training events • regular file checking, suitably recorded • use of Key Performance Indicators (KPIs) to assess employees' performance against the firm's standards, e.g persistency, complaints, compliance monitoring, standards of Fact Find completion and of general record keeping • regular product knowledge tests and accompanied calls, monitoring employees' continuing competence Treating Customers Fairly The FSA states that the principle of TCF is essential for:  The operation of an efficient retail financial services market  Promoting consumer confidence in the financial services market And that:  The principle must be taken on and supported by senior management in financial firms  The way customers are treated is an important element in the acquisition and retention of market share TCF outcomes The FSA has established six TCF outcomes and firms are expected to monitor their performance in relation to these outcomes and take action to ensure they achieve them  Consumers can be confident that they are dealing with firms where the fair treatment of customers is central to the corporate culture  Products and services marketed and sold in the retail market are designed to meet the needs of identified consumer groups and are targeted accordingly  Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale TCF outcomes  Where consumers receive advice, the advice is suitable and takes account of their circumstances  Consumers are provided with products that perform as firms have led them to expect, and the associated service is of an acceptable standard and as they have been led to expect  Consumers not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint Benefits of implementing TCF For customers:  Improved financial awareness  Ownership of suitable products  Better standards of service  More confidence in the market and the products For Firms and their stakeholders…  Improve customer confidence in the firm and its products  Improved retention  Additional sales  Fewer complaints  Improved staff morale, efficiently and retention  Lower operating costs The life cycle of financial products  Design and Governance  Identifying target markets  Marketing and promotion  Sales and advice process  After-sales information and service  Complaints handling The FSA’s Principles of Business  Maintaining confidence in the financial system  Securing the appropriate degree of protection for consumers  Reducing financial crime  Contributing to UK financial stability Any Questions?