The UK Financial Services Authority (FSA) has published a letter from new chief executive Hector Sants, setting out its view of good practice for managing compliance risk at investment banks.
The advice is based on findings during the course of the FSA’s work concerning the operations of 15 London-based investment banks, which were followed up with roundtable discussions to identify good practice in compliance.
The FSA recognises that “managing compliance risk is a complex and demanding task for firms, but one to which we attach the highest importance. It is also an area where significant changes are occurring in the way firms structure their compliance functions and consider compliance risk. Many firms are taking a more integrated approach than in the past, and several aspects of the management of compliance risk are moving closer to the risk disciplines used in other, longer established risk areas.”
The good practices are grouped into six areas deemed critical to managing compliance risk, the most important of which seems to be senior management engagement.
Click on the link below for a copy of the good practice guidelines.http://www.fsa.gov.uk/pubs/ceo/compliance_risk.pdf