‘Regulatory iceberg’ sinks compliance efforts
Despite the perception of stability in the financial services regulatory environment, constantly changing regulation and reporting requirements are affecting the efficacy and longevity of compliance programs.
The Australasian Compliance Institute (ACI) has now moved to examine the issue, with chief executive Martin Tolar announcing the organisation is currently preparing a white paper that looks at compliance within a bear market situation.
Speaking at the ACI Sector Forum, Ernst & Young executive director of compliance and regulation Anthony Philpott said being able to effectively manage the impact of regulatory change on an organisation’s compliance program has become increasingly important, particularly with respect to the current volatile market environment.
“Managing legislative and regulatory change effectively and efficiently is vital for the commercial success of an organisation,” he said.
“A compliance program should be designed to be robust and flexible enough to accommodate any legislative or regulatory change, no matter how small or large.”
Philpott said this was most evident in financial services, one of the most heavily-regulated sectors in the economy.
“You only have to look at the number of regulators currently operating; the Australian Securities and Investments Commission, Australian Prudential Regulation Authority, Australian Securities Exchange, Australian Taxation Office, AUSTRAC, Australian Competition and Consumer Commission, and that’s just the tip of the regulatory iceberg.”
ANZ executive manager of group compliance John Argiro said consulting widely, particularly within the compliance community when designing your program, is key.
“Consultation also promotes confidence in the integrity of the compliance program throughout the organisation and to the regulators. It also promotes awareness, opportunities to leverage and reduces duplication amongst supporting functions, including group legal, government relations and corporate secretarial,” he said.
Argiro said organisations needed to develop relationships with key regulators and formalise their regulator engagement programs.
“It’s important to develop clear understanding on who the regulators are and their expectations, as it enables you to better anticipate and prepare for upcoming legislative and regulatory impacts to your business,” Argiro said.
AUTHOR
Mike Taylor
Recommended for you
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
Australian investors are more confident than their APAC peers in reaching their financial goals and are targeting annual gains of more than 10 per cent, according to Fidelity International.
Zenith Investment Partners has lost its head of portfolio solutions Steven Tang after 17 years with the firm, the latest in a series of senior exits from the research house.
