Since 1 April 2023, all firms in the regulated sector have been required to carry out proliferation financing (PF) risk assessments.

This applies to all regulated entities, from law firms to financial services, casinos to cryptocurrency.

Regulated entities can create a new risk assessment on proliferation financing or incorporate PF risks into existing AML and terrorist financing risk assessments. However, regulators expect firms to take action to understand the risk of PF and how to mitigate it in their business. Failing to do so can result in a breach of the Money Laundering Regulations.

One year into this new requirement on the regulated sector, how effective have the new regulations been? What are the key strategies for compliance, and what are the best practice tips for ensuring PF obligations are met? In this webinar, we looked at the issue of proliferation financing in detail, discussed strategies for compliance, and shared best practices for understanding and mitigating PF risks.

This one-hour session covered:

– What proliferation financing is and the jurisdictions and industries at risk
– The differences and similarities between proliferation financing, money laundering and terrorist financing
– Practical examples of how proliferation financing can happen
– Proliferation red flags and high risk indicators
– Strategies and technologies to counter the risk of proliferation financing
– How to undertake a proliferation financing risk assessment

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FCA warns firms to do better on risk assessments and training

The Financial Conduct Authority (FCA) has warned over 1,000 Annex 1 firms (lenders, money brokers and financial leasing companies), about serious money laundering failings at the most basic level.

The FCA has written to these firms, making it clear that firms should “complete a gap analysis against each of the common weaknesses we have outlined within six months.” The FCA’s letter also says that in future engagements with the FCA, they expect to be provided with the findings from the gap analysis, the gaps identified, and the progress towards effective policies, controls and procedures. Failing to do so could result in regulatory action. 

The FCA’s review of financial crime controls revealed widespread weaknesses across various areas. Firms were found to be inconsistent in reporting their activities to the FCA, failing to adapt their controls to accommodate business growth, and lacking proper risk assessments. Additionally, the FCA identified shortcomings in due diligence procedures, ongoing monitoring, and the documentation of financial crime-related decisions. The review also highlighted a lack of resources and inadequate training provided to staff, alongside insufficient oversight from senior management. 

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The Market Abuse Regulation (MAR) is aimed at prohibiting insider dealing and unlawful disclosure of inside information, and market manipulation. Train your employees to protect them and your organisation from costly mistakes which could result in fines or even imprisonment. This eLearning course on MAR is set in an immersive format enabling learners to explore real-life case studies and evaluate the conduct presented to reduce the risks of breaching FCA regulations.

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Did you know the UK ranks second highest among money laundering hot spots worldwide? It’s estimated £88 billion is laundered every year.

Financial institutions are responsible for catching the bad actors to prevent and stop money laundering. But unfortunately, it’s not always easy to identify who they are. 

In this webinar, our experts, Nick Henderson, Naomi Grossman and Sandra Erez, explore money laundering, how it impacts financial services firms, and what firms can do to protect themselves.

The webinar covered: 

  • The importance of having risk assessments in place
  • Best practices for client due diligence
  • Understanding money laundering legislation – staying compliant or facing the consequences
  • How to identify red flags in financial transactions
  • What we can learn from recent high-profile money laundering fines

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You can listen to this webinar as a podcast episode here.

The AML crackdown continues, this time targeting one of Britain’s biggest banks

The UK’s Financial Conduct Authority (FCA) has launched an investigation into Barclays for suspected ongoing failings in compliance and anti-money laundering (AML) systems.

The Financial Times reported that the FCA issued a notice last spring requiring an independent review of the bank’s financial crime detection and prevention systems. The review was triggered by concerns over the amount of know-your-customer (KYC) and AML cases at Barclays.

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For firms involved in the financial markets, it is fairly easy to get caught up in illegal market abuse practices without even realising it. The temptation is great for staff members to trade on insider information or exploit the firm’s resources to try to manipulate the market. In many cases, the lines between what is acceptable and not are grey and unclear. 

The European Union launched Market Abuse Regulation (MAR) legislation in 2016 in order to reduce market abuse and protect investors. MAR requires all EU Member States to criminalise insider trading, market manipulation, and the unlawful disclosure of inside information. The United Kingdom adopted EU MAR into UK law when it left the EU in 2020, but since 2021 has developed its own set of amendments separately from the EU. 

Although MAR is an EU regulation, it applies to a wide variety of financial instruments traded anywhere in the world. 

Our new course on fraud & market abuse gives staff members the tools to identify different types of fraudulent market activities, know the regulations surrounding them, and prevent potential abuses on an organisational and personal level. 

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The Financial Conduct Authority (FCA) requires all non-bank payment service providers (PSPs) to perform safeguarding procedures. These procedures are designed to make sure that payments owed to customers are not at risk in the unlikely event that the firm could suddenly go into liquidation or be otherwise unable to make a payment. 

The most common safeguarding method, known as the segregation method, requires PSPs to make an immediate and clear separation between the money belonging to the customer and the fees taken by the PSP. This requires a constant process of separating funds into distinct and dedicated bank accounts, as well as recording and reconciling every transaction. 

Our new course explains how safeguarding is done and what non-technical staff members need to know about it. 

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What the new consumer duty means for the regulated sector

The UK’s financial regulator, the FCA, have confirmed its plans to introduce a new Consumer Duty, with the requirements in force from 31 July 2023.

This new Consumer Duty will have a significant impact on the entire regulated sector. 

The Consumer Duty forms part of the FCA’s transformation to become a more innovative, assertive and data-led regulator, and is a key part of the FCA’s new three-year strategy to improve outcomes for consumers and in markets throughout the UK. The FCA has confirmed it is embedding the Consumer Duty into its approach for authorisation, supervision and enforcement.

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The UK is introducing Sarbanes-Oxley. Are you ready?

Since 2019, all FCA-regulated firms are required to comply with the Senior Managers and Certification Regime (known as SMCR, or SM&CR) a program designed to raise standards of conduct for everyone working in financial services. Formulated after the financial crisis of 2008, SMCR provides a framework for firms to:

  • Encourage all staff to take personal responsibility for their actions
  • Ensure a clear understanding of the division of responsibilities among senior managers in a firm
  • Improve conduct at all levels

VinciWorks’ new course, SMCR: The Senior Managers and Certification Regime, will provide you with the training you need to comply with SMCR requirements. It includes an in-depth look at each of the five Conduct Rules for general staff and the four Conduct Rules for Senior Managers. 

Topics covered

  • The history of SMCR
  • Exploring the three pillars
  • The Senior Managers Regime
  • The Certification Regime
  • The Conduct Rules in depth
  • Who does this apply to? 
  • SMCR in the organisation
  • How to report a breach

Course features

  • Provides short but comprehensive training 
  • Includes practical examples and real-life case studies from the business world
  • Incorporates short, interactive assessments
  • Fully customisable for specific cases related to your business

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The FCA requires financial firms to follow a formal process for receiving and handling customer complaints. That means that workers must be trained in all the different steps of this process, from recognising complaints to investigating them, responding to, and recording each complaint properly. Failure by employees to comply with the requirements of any of a variety of laws and standards relating to the industry can result in fines or worse. 

VinciWorks’ new FCA Complaint handling course is designed to provide everything service employees need to know to comply with FCA requirements and, hopefully, please even the most dissatisfied customer. 

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