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Date: November 22, 2024 Fri
Time: 12:08 pm
Time: 12:08 pm
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1 results foundAuthor: Financial Services Authority (UK) Title: Anti-bribery and corruption systems and controls in investment banks Summary: 1.1 Introduction 1 This report describes how investment banks and firms carrying on investment banking or similar activities in the UK (collectively referred to here as "firms" are managing bribery and corruption risk in their businesses and sets out the findings of our recent thematic review. We expect regulated firms in all sectors to consider our findings and examples of good and poor practice, as they may also be relevant to firms in other sectors which are subject to our financial crime rules in SYSC 3.2.6R or SYSC 6.1.1R.1 2 We require regulated firms to establish and maintain effective systems and controls to mitigate financial crime risk. Financial crime risk includes the risk of bribery and corruption. (We summarise regulated firms' regulatory responsibilities in this area in Section 2.4.) In addition to these regulatory requirements, bribery, whether committed in the UK or abroad, is a criminal offence under the Bribery Act 2010, which has consolidated and replaced previous anti-bribery and corruption legislation in the UK. We do not enforce, or give guidance on, the Bribery Act. 1.2 Findings 3 We found that, although some investment banks had completed a great deal of work to implement effective anti-bribery and corruption (ABC) controls, most had more work to do. Our key findings are set out below: a) Most firms had not properly taken account of our rules covering bribery and corruption, either before the Bribery Act or after. There are fundamental differences between the two described in this report. For example, our rules require firms to put in place systems and controls to mitigate bribery and corruption risk and we do not need to find evidence of bribery taking place to take action against firms that fail to meet our requirements. b) Nearly half the firms in our sample still did not have an adequate ABC risk assessment, although progress has been made since the implementation of the Bribery Act. c) Management information (MI) on ABC provided to senior management was poor, making it difficult for us to see how firms' senior management could carry out their oversight functions effectively. d) The majority of firms had not yet thought about how to monitor the effectiveness of their ABC controls. Only two firms had either started or carried out specific anti-bribery and corruption internal audits. e) Firms' understanding of bribery and corruption was often very limited. f) There were significant weaknesses in firms' dealings with third parties used to win or retain business, including in relation to compliance approval; due diligence; politically exposed persons (PEP) screening; ensuring and documenting a clear business rationale; risk assessment; and regular review. g) Many firms had recently tightened up their gifts, hospitality and expenses policies by prohibiting facilitation payments, increasing senior management oversight of expenses and introducing or revising limits. But few had processes to produce adequate MI, for example, to ensure gifts and expenses in relation to particular clients/projects were reasonable on a cumulative basis. h) Firms had well-established vetting processes in place when staff were recruited, but bribery and corruption risk had not usually been a factor in identifying high-risk roles which should be subject to enhanced vetting. i) Since the implementation of the Bribery Act, firms had generally provided adequate basic training to staff. But most (i) were still developing training for staff in higher risk roles and (ii) had no processes in place to assess the effectiveness of existing training. Details: London: FSA, 2012. 56p. Source: Internet Resource: Accessed October 26, 2016 at: http://www.fsa.gov.uk/static/pubs/other/anti-bribery-investment-banks.pdf Year: 2012 Country: United Kingdom URL: http://www.fsa.gov.uk/static/pubs/other/anti-bribery-investment-banks.pdf Shelf Number: 146009 Keywords: Banking IndustryBriberyCorrectionFinancial Crimes |