63 posts categorised "Be fearless"
04 December 2019 FRC Client Assets Standard 2019 Kim Stainfield discusses the revised FRC Client Assets (“CASS”) Assurance Standard and it's contribution to improvements.
21 October 2019 FRC CASS consultation 2019 PwC have submitted feedback to the recent consultation on changes to the FRC Client Assets (“CASS”) Assurance Standard . From our experience, we consider that the Standard has contributed to a significant improvement in the quality and consistency of CASS audits. We also believe that the application of the Standard has contributed to a significant improvement in the understanding and documentation of control processes within regulated firms. However, in order to provide a more effective framework to improve audit quality, to support CASS auditors and to underpin the disciplinary process, we believe the FRC can further improve the clarity of some of the proposed requirements.
08 October 2019 LIBOR transition: Eliminating regulatory barriers ‘The time for last orders is now’, said Sir Dave Ramsden, Deputy Governor for Markets & Banking at the Bank of England (BoE), in a speech on LIBOR earlier this summer. Time and time again, the BoE and FCA have reiterated that LIBOR will stop after the end of 2021 and that market participants should get ready for this. To reduce reliance on LIBOR, regulators and central banks from across the globe have set up working groups to develop new risk free rates (RFRs) and promote their use wherever possible
24 September 2019 Can you tolerate being punched in the face? Publication of the regulatory consultation paper on operational resilience is imminent. The concept of setting impact tolerances for firms’ most important business services, introduced in the discussion paper, will be integral to this. Firms should not shy away from what can seem like a difficult question. There is a logical sequence of activities that can be undertaken to set tolerances, stress test them and monitor against them. PwC has been tackling this topic with firms across the financial sector and we will publish our approach to this challenge soon. In the meantime, we strongly encourage firms to start the groundwork by being clear what important business services you operate.
05 September 2019 Insurers and the SM&CR: Lessons from the banking stocktake report As the December deadline approaches for insurers to finish certification under SM&CR, the FCA’s stocktake report on how banks have embedded the regime gives insurers the opportunity to learn from its conclusions. Any issues identified by the FCA in the banks will read across to other sectors.
04 September 2019 Trust me, I’m a robot - Explainable AI in Financial Services The Financial Conduct Authority (FCA) has signalled that firms should focus on achieving “sufficient interpretability”, essentially a compromise between AI functionality and the ability to clearly explain its decisions to stakeholders. While sensible, the definition itself raises a number of questions firms need to tackle. First, the level of explainability that will suffice is unclear. Decisions reached with the help of AI may be explainable to a firm’s Chief Digital or Data Officer, but would a retail customer understand the implications?
03 September 2019 Tackling vulnerability and financial exclusion: When talk can be highly valuable Financial vulnerability and exclusion are widespread but often hidden problems. That’s why it’s so important that we get them out in the open and have a real conversation about the risks and how to tackle them.
02 September 2019 Coming a cropper - Data farms and insurance fraud Amidst other significant enforcement activity, the Information Commissioner’s Office (ICO) recently reported raids on two UK addresses as part of an ongoing investigation, conducted in partnership with the Insurance Fraud Bureau (IFB), into the suspected illegal acquisition and sale of personal data. The suspicion was that high volumes of data farming activity, or vishing, was taking place at these addresses to illegally obtain the personal data of motor accident victims to sell on to solicitors for personal injury insurance claims. In the context of the ongoing fight against insurance fraud, this is an important development. In this blog I highlight three of the most important themes I took away from it.
14 August 2019 Evolution or Revolution? HMT fires the starting gun on its review of the UK’s future regulatory framework Whatever the UK’s relationship with the EU ends up looking like, it’s clear that the UK’s regulatory framework needs to adapt to the new reality. This is driven not just by the fact that the UK will no longer be subject to the EU’s regulatory framework (assuming the UK leaves the single market), but also because of the scale of change and disruption in financial services from technology, new players and changing demographics.
13 August 2019 Seeing beyond Peak Reg: collaboration between regulatory and strategic projects By Brian Polk, Director So far in this series of blogposts on bank regulation, we’ve looked at whether ‘Peak Reg’— the point at which the...
12 August 2019 Sustainable investment in the spotlight: what asset managers should look out for By Lucas Penfold and Leo Donnachie Sustainable investing is attracting unprecedented levels of attention from regulators, both domestically and internationally. With an increasing public appetite...
01 August 2019 CASS audit reports on nominee companies SUP 3.10.5 R (3) requires the CASS audit report to include an opinion on a nominee in whose name client custody assets are registered. However, working out whether the rule applies in particular circumstances, and what the report should say; is less than straightforward.
26 July 2019 Beyond prudential regulation: welcome to the next wave of regulatory priorities By Brian Polk I began this short series of blog posts on developments in bank regulation by asking whether ‘Peak Reg’ has been reached—the point...
25 July 2019 Don’t leave it too late to get your governance right Governance can often be seen as an administrative burden - agenda setting, minute taking, cross referencing between committees. It can be seen as a ‘need to do’ rather than something that helps an organisation achieve success. In the worst cases, it can be seen as something that needs to be circumvented to actually get things done in an organisation. That is, until something goes wrong
25 July 2019 The end of legacy systems is nigh The Treasury Select Committee (TSC) heard from representatives from the PRA, BoE and FCA on 24 July, in what we believe to be the last session in its inquiry into IT failures within financial services. This follows earlier sessions with industry representatives, as well as PwC and TheCityUK where we discussed our recent report on operational resilience.The questions in this latest session were predictably wide-ranging as the committee members looked for assurance from the regulators on how well prepared financial services firms are to withstand operational disruption, and to find out more about future plans to enhance the industry standards as well as develop the regulators’ own capabilities. Two key themes stood out for us.
15 July 2019 Parliament keeps the spotlight on operational resilience When you enter the Houses of Parliament it is impossible not to be impressed by the historical significance of the setting. But despite the Victorian grandeur of the location we were there this week to discuss a very modern phenomenon - IT and other operational failures in the financial services sector. Following a number of high profile operational incidents in the financial services sector in recent years, the Treasury Select Committee (TSC) has launched an inquiry into this topic. We were very privileged to be called to give evidence to the first public session of the inquiry to discuss a recent report we produced with TheCityUK on operational resilience.
15 July 2019 Making the first move on technology for regulatory reporting quality assessments A speech by Mark Carney, the Governor of the Bank of England, in June 2019 stated that the Bank of England is launching a review to explore the transformation of the hosting and use of regulatory data over the next decade. This includes proofs of concepts to test how the Bank can automatically extract regulatory firm data. The speech clearly highlighted the Bank’s increased focus on exploring how Artificial Intelligence (AI) and Machine Learning (ML) technologies can be used to collect and interpret supervisory data from firms to minimise manual processes. The Bank aims to pull the data on demand from firms, making the regulatory reporting process more efficient and less expensive.
04 July 2019 All change please: the evolving regulatory focus The annual speeches by the Chancellor and Governor of the Bank of England (BoE) at the Mansion House are always important dates in the diary for the financial services sector. This year’s speech was the last that Mark Carney will give as Governor and many expect that Philip Hammond will no longer be Chancellor once a new Prime Minister is appointed. In ‘normal’ times the replacement within a six month period of the two most influential financial services policy makers in the UK would represent an unusual amount of change. But as the sector currently faces a number of profound disruptions, challenges and opportunities, the 2019 speeches are more likely to be remembered as an important signal of the policy makers’ response to these.
27 June 2019 Ensuring resilience - from Cloud to climate change Just as policemen seem to be getting younger, so the pace of change outlined by the Governor of the Bank of England in his annual Mansion House speech appears to accelerate every year, and this year has been no exception. Some of the statistics thrown out by Mark Carney at this year’s Mansion House event are extraordinary: last year, one fifth of sales were online, whereas this year it will be one quarter.
25 June 2019 With great computing power comes great accountability Scroll through a newsfeed nowadays and it’s difficult to avoid the latest take on innovative technologies such as Artificial Intelligence (AI), machine learning and advanced data analytics. These technological developments are beginning to disrupt the way in which financial services firms operate. A recent report by PwC shows that, while firms are at varying degrees of maturity in adoption, many are now embracing these technologies to transform activities such as risk management, fraud detection and post-trade processes. While these innovations are likely to be adopted by many within financial services, debate is growing around the disruptive power of new technologies and who is ultimately accountable for ensuring they are used responsibly.
24 June 2019 Have banks reached ‘Peak Reg’? Or are there mountains yet to climb? By Brian Polk In the energy industry, a concept has emerged called ‘Peak Oil’ - defined as the moment when global petroleum extraction reaches its...
04 June 2019 Becoming operationally resilient - the imperatives: Part 2 - the commercial imperative In part 1 of this blog we unpicked the business plans for 2019/20 for the FCA and PRA insofar as they relate to operational resilience. The main message we would take from the FCA plans, which reveal the most detail, is that the regulator has a wide programme of supervisory activities based on existing regulation, before it factors in the work on any new policy statement.
31 May 2019 Becoming operationally resilient - the imperatives: Part 1 - The regulatory imperative How can you say you’re good at change management when it’s the most common cause of IT failure? How are you able to manage the relationships with your growing network of third parties?Forget questionnaires, how will you perform when we put your cyber framework to the test?These are the frank questions the FCA is likely to ask financial services firms this year based on a reading of its 2019/20 business plan, published in April. This is the latest publication showing that regulators have their sights squarely set on ensuring that firms are operationally resilient, and comes after the PRA published its own business plan. In the first of a two-part blog looking at the drivers for firms’ action on operational resilience we consider the regulatory imperative; part two will cover the commercial imperative.
08 May 2019 The Value of the Value Assessment The value assessment is a valuable exercise: asset managers that have embraced this challenge are seeking to enhance transparency, communications and outcomes for investors, and better manage their own fund range. But in order to realise these benefits, firms must allocate sufficient resources to designing a robust and repeatable approach that harnesses the data and analytics required to perform the assessment.
24 April 2019 Navigating the “Trade vs Settlement” debate The question of “Trade vs Settlement” accounting for client custody assets has caused a wide range of debate across the industry. Should a firm record and monitor the assets actually held for clients at a point in time (the settled basis) or additionally reflect the economic impact of any in-flight trades: e.g.: excluding assets which the client has contracted to sell; and including assets which have been purchased but not yet paid for (the trade basis)?
- Andrew Gray
- Ann-Marie Stone
- Asset Management market study
- Be fearless
- Brian Polk
- Conduct and culture
- Conor MacManus
- Daniel de Búrca
- Financial crime
- Financial Participation
- Grant Lee
- IFRS 17
- MiFID II
- Operational Resilience
- Risk strategy
- Sarah Isted
- Senior Managers & Certification Regime (SM&CR)
- Senior managers regime
- Simon Chard
- Solvency II