There is a continual flux of regulatory reporting changes. There also recent high profiles of banks being fined large sums for non- compliance.Some recent news:
The DFSA proposed changes to the forms that authorised firms submit through the Electronic Prudential Reporting System, which has necessitated changes to the PIB and PIN modules (and consequently the FER module on Fees) of the DFSA Rulebook. The objectives in the rule changes are primarily to improve the collection of data in line with their risk-based supervision approach, but have also filled certain reporting gaps such as the reporting of foreign exchange positions as required under the Basel standards on banking supervision. The proposed revised forms are also included in the updated PRU module. The regulator has also made a specific proposal that the period for submission of the Quarterly Regulatory Return (under PIN 6.5.7) and the Financial Group Capital Adequacy Return (under PIN 6.6.2) should be reduced from two months after the period end to one month after the period end.
Some UAE Central Bank Rule Changes announced for 2014:
The UAE Central Bank will introduce a series of new rules to regulate outsourcing, disaster recovery, Shariah banking, financial statements regulations and CEO’s financial bonuses, to enhance performance and ensure conformity with international standards and best practices.
• The Central Bank is planning to introduce financial services law (framework law), the new banking law and a new law regarding criminalisation of money laundering.
• In the sphere of banking supervision, the directors approved the project on the Implementation of the US Foreign Account Tax Compliance Act (FATCA) under which financial institutions will be obliged to make certain disclosures to the IRS concerning accounts belonging to US nationals.
• In the area of monetary policy instruments and reserve management, the Central Bank is considering introducing a discount window, a settlement system linked to securities custody and financial stability.
• The Central Bank is working to launch a virtual banking system in order to facilitate financial inclusion and the smart government systems on mobile phones.
• The Central Bank agreed to establish an Economic research department and a risk monitoring unit.
In December 2013, the Government of Dubai announced the Dubai Islamic Economy Development Centre and its board of directors as part of its goal to make the Emirate of Dubai the global capital of Islamic finance. Law No 42 of 2013 details the basic objectives of the Centre, which includes drawing up the Centre’s general policy and setting up strategic plans for the development of the sector in the Emirate, in addition to developing comprehensive and unified standards to judge the extent to which any commodity or financial service or otherwise complies with the provisions of Islamic law, and promoting these standards locally and globally.
Qatar Central Bank (QCB), the Qatar Financial Centre Regulatory Authority (QFCRA) and the Qatar Financial Market Authority (QFMA), jointly launched a strategic plan for the future of financial sector regulation in the country to position Qatar as a leader in the region in financial sector regulations and thereby to support Doha’s ambitions to be a global financial centre. The goals are to enhance regulation by developing a consistent risk-based micro-prudential framework; expanding macro-prudential oversight; strengthening financial market infrastructure; enhancing consumer and investor protection; promoting regulatory cooperation; and building human capital. The move comes as regulators around the world increase their focus on systemic risks, and demand greater co-operation and co-ordination among financial sector regulators at the local, regional and international levels. The Qatari plan sets out how the regulatory authorities will work together to help build a resilient financial sector that operates to the highest international standards of regulation and supervision
Some recent regulatory fines in the banking sector:
JPMorgan was hit with $20 billion worth of fines during 2013
FCA Fined Lloyds £28 million for ‘serious failings’ – because Lloyds TSB had been fined in 2003 for unsuitable sales of bonds, the regulator increased the fine by ten per cent, making it the largest fine ever imposed by the regulator or its predecessor, the Financial Services Authority. Lloyds has made an obligatory apology and the FCA said that changes and the redress being made by the group correct many of the issues.
US Regulators Fined RBS $100 million for violating US sanctions against Iran, Sudan, Burma, and Cuba, between 2005 and 2009. This settlement follows others by international banks in recent years, including $674m paid by Standard Chartered in 2012 for violating sanctions against Iran, and $1.9bn paid by HSBC in 2013 for sanctions violations and laundering money for Mexican drug cartels.
FINRA Fined Barclays Capital over Record Keeping – The Financial Industry Regulatory Authority (FINRA), which acts as Wall Street’s self-regulator, fined Barclay’s Capital $3.75 million for failing to properly preserve electronic records as well as certain emails and instant messages for at least a decade. FINRA stated that it fined the brokerage unit of Barclays PLC for not keeping the records in a non-rewritable, non-erasable format to prevent alteration, as mandated by the Securities and Exchange Commission requirements (the format required by regulators is called WORM (Write-Once, Read-Many). This was a widespread issue affecting all of the firm’s business areas, and Barclays was unable to determine whether all of its electronic books and records were maintained in an unaltered condition. FINRA also noted that proper book-keeping and record storage are regulators’ primary means of monitoring whether banks are in compliance with securities laws. Therefore ensuring the integrity, accuracy and accessibility of electronic books and records is essential to a firm’s ability to meet its compliance obligations.
If you have headache in timely, compliant, regulatory reporting then the bad news is that its going to get tougher very soon. The good news is that BRSAnalytics is a proven solution to automate much of the process of report generation, and to simplify the creation of new reports or report changes. Its in built data warehouse and Excel ad hoc analytic layer also makes it much easier to respond quickly to Central Bank queries for more information.
That is why we have are meeting with 10 banks this week and next. If we missed you and you need to know more then please contact us for information, a remote demonstration or to meet with you. 00971 43365589
For further information see our previous blog articles.
