The FSA’s report following its thematic review into anti-bribery and corruption (ABC) systems was published in March 2012. This review was conducted across 15 investment banks and smaller firms specialising in investment banking business in the UK between August 2011 and January 2012. The FSA also consulted with Government, as well as other interested stakeholders in the UK and internationally. The FSA found that, despite a long-standing regulatory requirement to mitigate financial crime risk, the majority of firms reviewed had more work to do to implement effective anti-bribery and corruption systems and controls. - Most firms had not properly taken account of FSA rules covering bribery and corruption, either before or after the implementation of the Bribery Act 2010 Nearly half the firms did not have an adequate ABC risk assessment
- Management information on ABC was poor, making it difficult to see how firms’ senior management could provide effective oversight
- Only two firms had either started or carried out specific ABC internal audits
- There were significant issues in firms’ dealings with third parties used to win or retain business
- Though many firms had recently tightened up their gifts, hospitality and expenses policies, few had processes to ensure gifts and expenses in relation to particular clients/projects were reasonable on a cumulative basis.
Review recommendations The review provides a summary of what can be regarded as good and bad practice in the following areas: - Assessing bribery and corruption risk
- Policies and procedures
- Third party relationships and due diligence
- Payment controls
- Gifts and hospitality
- Staff recruitment and vetting
- Training and awareness
Headline issues ABC is a serious threat to the well being of both the investment banking sector and the UK’s position as a global leader in the financial services industry. The global economy means that businesses now operate in an environment where levels of regulation vary from country to country. Acceptable business practice in one region will be seen as unacceptable elsewhere. In this environment it is critical that businesses adopt a sustainable and effective means by which to ensure compliance is effective, consistent and auditable. - Accessing global data to effectively manage ABC risk ensures that comprehensive checks can be performed quickly and appropriately
- A structured policy towards risk scoring, based on recognised standards, provides a consistent approach to risk management
An audit trail of decisions taken and research behind these decisions helps to ensure ABC process covers all checks and balances needed for future monitoring - Consistent access to archive data is required. Web links can be lost or broken and do not provide the necessary backup materials effectively
- Access to comprehensive research in a timely and consistent manner helps deliver an effective enhanced due diligence process
- Obtaining relevant data in emerging markets can be challenging without access to comprehensive global content
In short, being able to access key content when you most need it is critical to managing business risk in ABC. This content needs to be global, simple to access and control, relevant and cost effective. Access to the same content on an ongoing basis is essential to ensure compliance. |
