2022年1月6日
资讯洞见
In April 2019 the UK’s Financial Conduct Authority (FCA) published its Approach to Supervision feedback statement and, in May 2019, a paper on “Progress and challenges” 5 Conduct Questions. The 5 Conduct Questions were introduced as a supervisory programme for wholesale banks in 2015 and have now been incorporated into the FCA’s Approach to Supervision which applies across all financial sectors, whether they operate at a retail or wholesale level.
The FCA has made it clear that all firms they regulate should consider the 5 Conduct Questions and be prepared to discuss their assessments and conclusions during a supervisory review. It also considers that the work should be carried out at senior management level.
In Hong Kong, the Securities and Futures Commission (SFC) has not to date published anything akin to the FCA’s conduct questions, but it has increased its emphasis over recent years on accountability and weeding out bad behaviour, as evidenced by the implementation of the Manager-in-Charge regime and, more recently, the introduction of a significantly revised and expanded Business and Risk Management Questionnaire (BRMQ).
The FCA’s 5 Conduct Questions are:
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1) |
What proactive steps do you take as a firm to identify the conduct risks inherent within your business? |
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2) |
How do you encourage the individuals who work in front, middle, back office, control and support functions to feel and be responsible for managing the conduct of their business? |
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3) |
What support (broadly defined) does the firm put in place to enable those who work for it to improve the conduct of their business or function? |
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4) |
How does the Board and ExCo (or appropriate senior management) gain oversight of the conduct of business within their organisation and, equally importantly, how does the Board or ExCo consider the conduct implications of the strategic decision that they make? |
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5) |
Has the firm assessed whether there are any other activities that it undertakes that could undermine strategies put in place to improve conduct? |
As SFC licensed firms consider how they will revise their annual compliance plans moving forward in light of the Manager-in-Charge regime and revised BRMQ, it may be helpful for senior management at Hong Kong firms to ask themselves these same 5 Conduct Questions annually to determine how they can improve their compliance infrastructure.
The FCA’s May paper goes on to address whistleblowing. Since September 2016, it has been a regulatory requirement for UK firms to make available a “well-functioning” whistleblowing procedure and the FCA reports that “all firms now have a well-organised policy and process around an established whistleblowing channel and staff have good awareness of the process” although it noted the “troubling fact that non-financial misconduct” is “widespread”.
In Hong Kong, whilst there is not currently an explicit regulatory requirement for SFC licensed firms to maintain a whistleblowing channel, the new BRMQ specifically asks whether the firm maintains “whistleblowing procedures for reporting by staff on any malpractices and unethical behaviours in an appropriate and confidential channel”. The BRMQ may be viewed as signalling the areas of business operations, including controls, policies and procedures that the SFC expects firms to have considered, and to be able to discuss their conclusions and adopted approach at a supervisory inspection.
