First it was insurance brokers and now it's investment bankers... FSA tests anti-bribery and corruption controls at investment banks
The FSA recently published the findings of its thematic review of anti-bribery and corruption (ABC) systems and controls at 15 investment banks.
The majority of firms in the sample were found to have more work to do to implement effective systems and controls. The FSA identified the following common weaknesses:
- Most firms had not properly taken account of the FSA's rules covering bribery and corruption, either before the implementation of the Bribery Act 2010 or after;
- Nearly half the firms in the sample did not have an adequate ABC risk assessment;
- MI on ABC was poor, making it difficult for the FSA to see how firms’ senior management could provide effective oversight; and
- There were significant issues in firms’ dealings with third parties used to win or retain business.
Tracey McDermott, acting Director of Enforcement and Financial Crime, said: "Overall, despite the high profile of the issue, the investment banking sector has been too slow and too reactive in managing bribery and corruption risks".
The FSA is considering whether further regulatory action is required in relation to certain firms in its review.
It goes without saying that all regulated firms should urgently undertake the following before the FSA, or FCA, comes knocking:
- Risk Assessment, Risk Assessment, Risk Assessment! You cannot adequately address ABC until you understand the risks you face;
- Drafting ABC policy and procedures before you have a complete Risk Assessment in place is a complete waste of time;
- Read and apply the FSA Financial Crime Guide - to state the obvious!
- Evaluate your MI (senior management oversight being the "12th" Principle for Business).
- KYTP: Know your Third Party Introducers through:
- Due diligence
- Some more due diligence
- Ongoing due diligence
- Internal audit
- Face-to-face ABC training