There are very few circumstances in life that The Life of Brian
doesn't have a suitable quote for. The "What have
the Romans ever given us?" scene sprang to mind
recently when listening to not uncommon complaints that the
compliance function was hindering business development or being
otherwise obstructive or unhelpful. This scenario usually
unfolds as a result of failures on the part of those involved in
the compliance function as much as those in the front line, whether
senior directors or more junior members of staff.
Too often the role of compliance is seen by the business as a
"Can I do this?" check, or, alternatively a "Keep me
either out of jail or under the regulator's radar"
function. In other words, doing the minimum required so as to
keep costs down and noses clean, breeding a culture of 'us and
them'. In practical terms, the symptoms of such an
attitude are usually obvious to an experienced external
observer. The first is an obsession with rules and
identifying breaches without explaining why a particular rule has
been breached, offering recommendations of how failings can be
remedied or providing training to allow staff to identify what is
permissible and what is not. These deficiencies result in
compliance and the business playing a game of cat and mouse,
creating a sense that compliance is setting traps for the unwary
client service team to fall into.
Secondly, the compliance function (or most likely the Compliance
Officer) is more concerned about maintaining its standing and
relationship with the regulator than getting answers to regulatory
problems. In short, the compliance function takes refuge in
rule books and an unnecessarily aggressive approach to getting its
While it is true that compliance is about making sure regulated
firms stick to the laws and regulations which govern their conduct,
there are also significant benefits beyond this immediate
objective, if done correctly.
First and foremost, much of the legislation and regulation in
force is designed to ensure that customers are treated fairly and
with skill. The net result should be a customer who is
satisfied, has trust in an organisation and who is keen to continue
a (hopefully) profitable relationship. There are myriad
regulations which seek to ensure that this is so and which should
be the subject of compliance's attention: rules about conflicts
of interest, competency and qualification, record keeping,
requirements to ensure suitability of product and so on.
Inevitably some operators seek to circumvent or ignore these
requirements. It is unsurprising that those who do are
frequently the ones subject to regulatory enforcement and/or client
Secondly, the compliance function should be a source of valuable
information about the business and should help the corporate
governance of a firm. Too frequently, this source remains
untapped and ignored. Part of the compliance function's
role is to monitor whether policies and procedures are being
followed – be they in the areas of conduct of business,
compliance with AML/CFT requirements or Codes of Practice, for
example. This should provide a wealth of data which should be
fed back up to the Board of an organisation to assess, in essence,
whether what they said they would do is actually being carried out
in practice. This should be part of a continuous feedback
loop which allows a financial services business to either realign
its objectives or reassess whether the policies and procedures are
effective in achieving the objectives set.
Inevitably, there are factors which are outside the control of
compliance – changes in legislation, market movements and
other external factors but, at the very least, compliance should be
able to monitor these and provide an informed view as to what
impact these might have on how the business does and should, in the
future, operate. Perhaps the right question isn't 'what has
compliance ever done for us?' but 'why don't we let it
Failure to comply with company law in Hong Kong can be very expensive for businesses. In a highly dynamic business and regulatory environment such as Hong Kong, it is challenging for business owners to remain fully aware of the latest legal requirements.
In our article " Characteristics of the Commercial Agency Law of the United Arab Emirates" published with Mondaq on 27.09.2016, we outlined the general applicability of the UAE Commercial Agency Law (Federal Law No. 18 of 1981 including its amendments).
Confidentiality of corporate documents and information is one of
the key attractions of incorporating a company in the BVI. A
company search of the BVI Registrar of Corporate Affairs will only
disclose certain information and documents.
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