The FSA has published a report of the findings from its thematic review of anti-bribery and corruption systems and controls in investment banks. The review consisted of a visit to 15 investment banks of varying sizes by the FSA to examine how they mitigate risks associated with bribery and corruption.
The report found that the investment banking sector has been slow and reactive in managing these risks, despite the high profile and publicity surrounding the Bribery Act 2010. As a result of these findings, the FSA have issued a guidance consultation setting out the amendments it proposes to make to its recently published financial crime guide (FC) (GC12/5). The guidance proposes to consolidate all examples of good and bad practice as well as additional guidance following on from the findings of its report.
The proposed new guidance will apply to all firms that are subject to the FSA's financial crime requirements and not just the investment banking sector.
In conducting its review, the FSA found that most of the firms visited had more work to do to implement effective anti-bribery and corruption systems and controls. Common weaknesses included:
- Limited understanding of the applicable legal and regulatory framework;
- Incomplete or inadequate bribery and corruption risk assessments;
- Lack of senior management oversight; and
- Failure to monitor the effective implementation of and compliance with suitable policies and procedures.
As a result of its findings, the FSA in considering whether further regulatory action is necessary for certain firms it visited during its review. The FSA also advised that it and its successor body will continue to focus on anti-bribery and corruption issues in the financial services sector.
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