Happy New Year to you all and we hope you had a peaceful and restful festive period.
2018 proved to be a busy one for the compliance industry and indeed Model Office-MO®, with major consumer protection regulatory directives coming into force:
PRIIPs: The Regulation on Key Information Documents for Packaged Retail and Insurance based Investment Products, aimed to extend the MiFID II standards of consumer protection. A tad controversial with The FCA having to clarify expectations on PRIIPs communications
MiFID II: Introducing new demands across service disclosure, distribution, client communications, Inducements, Conflicts of interest Advice suitability and product features and benefits appropriateness
The General Data Protection Regulation (GDPR): Covering all firms processing and storing client data, new lawful basis, stronger consent controls, purpose limitation and data minimisation
Insurance Distribution Directive (IDD): Concerning the distribution of insurance based investment products (IBIPs) and builds on the Insurance Mediation Directive (IMD) brought additional knowledge and competency, product oversight and governance requirements, disclosure around bundled products and remuneration, conflicts of interest and inducements.
So what do we have to concern ourselves with for 2019?
Apart from reviewing the above, the Advice Suitability Review II, and a follow up RDR/FAMR study, the good news is we only have one new and key directive to worry about (famous last words) which is the all singing and dancing:
The Senior Managers and Certification Regime (SM&CR): This is the big one in regards to individual accountability and (in our opinion) is the biggest piece of regulation to effect retail financial services to date. This builds on The FCA push for high standards of individual and firm accountability and requires a root and branch review with firms required to identify, measure and improved conduct and culture.
The SM&CR came into force for Banks in 2016, but by December 9th 2019 will cover all retail firms classed across Limited Scope, Core and Enhanced firms, bringing new standards across roles and responsibilities, fit and proper status certification and reporting and conduct measurement requirements.
But wait, we also have BREXIT! Yes we mentioned the ‘B’ word because firms will need to ensure they have a (Deal or No Deal) strategy to measure an impact process across client needs, communications, product tax and legal requirements, market exposure, counter-party risks, data management and much more….
If any of these issues concern you (and they should) then Model Office-MO® Digital Compliance platform can help. MO® identifies problems early, cuts through the noise and provides tiered tasks and resources for firms to improve compliance and professional practice.
MO® also has new development in the 2019 Q1 pipeline to further streamline compliance activity saving you time and costs:
- Full integration with back office platforms to provide automated AML-PEP Sanctions reports, Data Quality and advice suitability health checks
- Alignment with Professional Indemnity underwriters to potentially reduce PI premiums for those firms performing well
- Financial Ratio outputs to allow firms to prepare for Merger and Acquisition activity plus showcase their financial strength and stability
Along with this we have new question sets for those firms who have already benchmarked their regulatory baseline and nudge facilities to encourage those firms who are yet to self-audit against the regulations and we launch a Digital Compliance Podcast and continue our RegTech Webinar series plus publish our research papers on The SM&CR and more.
A busy year ahead beckons, so we look forward to working with our clients to ensure high compliance, client centricity and professional practice sustainability..
The Model Office Team
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