On 29 March 2012 the FSA published the results of its thematic
review into anti-bribery and corruption (so-called "ABC")
systems and controls in investment banks. The FSA visited 15 firms,
including eight major global investment banks and a number of
smaller operations, to examine how firms mitigate bribery and
corruption risk.
This review followed the FSA's thematic review of commercial
insurance broker firms in May 2010. Despite long-standing
regulatory requirements to mitigate financial crime risk, and
notwithstanding the implementation of the Bribery Act 2010 on 1
July 2011, the FSA found that the majority of firms still had more
work to do in implementing effective ABC systems and
controls.
The findings of the FSA's review signal the continued intent of
the regulator to focus on anti-bribery and corruption issues
– and explicitly not just for investment banks, but for
FSA regulated firms in all sectors. The message is clear: for
regulated firms there is a requirement proactively to establish and
maintain effective systems and controls to mitigate against bribery
and corruption, which the FSA will police and enforce. Such systems
will of course also constitute or form part of each firm's
"adequate procedures" under the Bribery Act 2010.
However, it is important that regulated firms recognise that they
may be exposed to regulatory sanction not only where bribery has
occurred, but also where they cannot show appropriate systems for
its prevention. To that extent, regulated firms face a US
FCPA-style sanction for failing to have adequate procedures in a
way non-regulated firms do not.
For further analysis, please click
here.
For the FSA report, please click here.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 02/04/2012.
