Compliance Monitor

The Financial Services Bill, now making its way through Parliament, contains important provisions relating to consumer redress which, if enacted, would have far reaching implications for the financial services industry as Simon Orton and Kitty Edwards of Freshfields Bruckhaus Deringer explain.

Market abuse confession costs oil executive record fine Voluntary admission of trading on inside information has cost Mehmet Sepil, CEO of Genel Energi, a Turkish oil exploration company, £967,005, the highest penalty for market abuse levied..

Reporting by Timon Molloy.

Integrity is a concept usually associated with honesty. An approved person might therefore expect his integrity to remain intact provided he refrains from any dishonest conduct. Recent decisions, however, have indicated an increasing tendency on the part of the FSA to treat negligence as an integrity issue, writes Katie Stephen of Norton Rose.

Antony Whitehouse was interviewed by Timon Molloy.

In January, FSA published CP10/3 on effective corporate governance, which reflects some of the regulator-specific recommendations in last November’s Walker Review. For some time FSA has emphasised governance and the capability of individuals in key governance roles but “in light of recent events, we recognise that our focus on the quality of governance and the intensity of our previous supervisory assessment of it did not adequately reflect its importance.”(Para 1.2, CP10/3). Richard Burger and Andrew Davidson of Reynolds Porter Chamberlain LLP study the proposed correctives.

Historically, compliance for fund managers was all about ensuring that investment limits had not been breached and that any promised benchmarks had been safely hit. Now, with the Standard Life fine and a series of other compliance disasters in this area, such as AIG, Arch Cru and the various structured product nightmares, those who provide funds for both retail and wholesale sectors have a new hot compliance problem to worry about. Does the fund do what it is supposed to do and contain what we say it contains? We asked regulator contributor and editorial board member (not to mention very small ex-investor in the Standard Life Pension Sterling Fund and someone responsible for bringing complaints about the AIG Premier Access Bond), Adam Samuel to look at this new compliance minefield.

Fiona Raistrick (+44 (0) 20 7893 2529, Fiona.Raistrick@bdo.co.uk) is Head of the Regulation within BDO’s Financial Services Risk & Regulatory Practice