Top Takeaways from our Financial Services & Regulatory Forum with QEB Hollis Whiteman
25 October 2019
We hosted our third annual Mourant and QEB Hollis Whiteman Financial Services & Regulatory Forum on 16 October 2019.
In case you missed the event, here are our top five takeaway points:
1. Effectiveness & Enforcement
We heard from Martin Moloney, Director General of the Jersey Financial Services Commission, and it is clear that effectiveness is currently a primary objective for the regulator, in particular with a view to future external assessments of Jersey. In addition to the regulator considering its risk-based approach and data gathering exercises, this will involve the regulator considering enforcement options. During the afternoon we heard about the many enforcement cases in the UK, as well as developments in the area in Jersey. We also covered some top tips for entities facing breach scenarios and how to react to potential enforcement action.
2. Individual accountability
The Senior Managers and Certification Regime in the UK creates significant focus on individual accountability. Whilst the regime is not (presently) replicated in Jersey, it is clearly relevant to those with responsibilities that extend to the United Kingdom, as well as giving a clear indication of the expectation of regulators on the sort of conduct that needs to be addressed and reported within regulated firms, together with ensuring individual responsibilities and accountability is clear.
3. Cannabis investment
A topical area at present is in connection with investments connected to cannabis-related businesses, in particular given the different laws and licensing regimes around the world. Investment in, and dealing in funds connected to, cannabis businesses is a complex area and raises Proceeds of Crime issues in both the UK and Jersey. However, some activities are permissible, providing appropriate due diligence is undertaken and equivalent regimes can be identified.
4. Risk Evaluation and Risk-Approach
The areas of exposure for businesses are growing, with the civil penalty regime in Jersey as well as potential developments to corporate criminal liability emanating from the UK. Understanding these risks, and ensuring a business has appropriate procedures and oversight in place is key. This is particularly the case concerning outsourced services, given some high-profile enforcement cases in that area.
Whistleblowing is an increasing area of focus for the regulators and, therefore, the regulated sector. Ensuring appropriate whistleblowing procedures are in operation and are practised in businesses is key to addressing regulatory risk. There are potentially significant implications for businesses and individuals arising from reactions to whistleblower allegations.