The UK financial regulator has reviewed asset management and platform firms to look at their crime controls, as a prelude to possible disciplinary action. This article considers the details.

Bribery control

On the subject of bribery control, the regulator is keen to see the rationale for each firm's use of agents and collaborators being documented because these people are thought to be the source of much corruption in financial services. It wants gifts and entertainment policies to be clear and available for all staff, but stops maddeningly short of giving the regulated community something it has long been crying out for: solid guidelines with concrete cash amounts being mentioned for every generic case. It could have done this in April at its inception; the fact that it is not doing so here is a sign that it never will.

The regulator's dislikes, the “bad practices” of anti-bribery control, seem rather irrelevant in an environment where its guidance is so vague. Once again, the emphasis is on tying up large amounts of senior management time. It thinks it is bad practice, for example, for gifts and entertainment activity not to be monitored consistently by senior managers. More realistically, it is concerned that firms are not doing enough to monitor the anti-bribery efforts of their associates and counterparties. The FCA notes in the body of the report that contracts with these people ought to contain a 'right to audit' clause.

“Good practice” for training and awareness includes the rolling-out of good training to all staff; even better training for senior management; tailored training with a special eye on the firm's business activities; periodic reviews; and above all good records of who has been trained and how. These are common sense, as are the FCA's statements of “bad practice”. These include the non-training and non-involvement of senior management; the absence of extra training for new joiners; and the use of training as a one-off exercise.

The tenor of the report might presage a new round of enforcement activity, but the reader is left with a sense that much has been achieved in the past few years in compliance. It states that most firms in the survey did have “a comprehensive suite of AML policies and procedures approved by senior management.” A few years ago this would have been unthinkable.