NCM’s Kathleen McLeay & Tom Cook were part of a busy Edinburgh audience for Scottish Financial Enterprise & Addleshaw Goddard’s session on 21 February 2019 focusing on the latest developments in financial crime, affecting financial services firms and other corporates. Speaking at the event were Partners at Addleshaw Nichola Peters & David Pygott.
The session got underway with commentary on the changing prosecution landscape in the wake of Lisa Osofsky’s September 2018 appointment as Director of the SFO and a look at deferred prosecution agreements encompassing the corporate vs individual implications, privilege in investigations and the possibility of more DPAs once clearer guidelines became available around self-reporting. The subject of DPAs was explored further looking at case studies and lessons for compliance as well as lessons from recent convictions.
A look back at Scottish Limited Partnerships was next and how in response to concerning trends with the sharp increase in the number of registrations by formation agents, The Scottish Partnerships (Register of People with Significant Control) Regulations 2017 are having a positive impact, bringing registration numbers back to pre-2016 levels.
Next was a look at ‘where are we now?’ in terms of the EU’s Fifth Money Laundering Directive (MLD5) which came into force in July 2018 and has to be transposed by member states by 10 January 2020 and the impact of Brexit on MLD5 implementation in the UK. The key issues for in scope firms were highlighted along with changes for crypto currency firms, enhancements to beneficial ownership registers for trusts and ‘centralised automated mechanisms’ which will allow identification of holders of payment accounts and bank accounts identified by IBAN. The HMT consultation on implementation is expected shortly with the consultation on draft UK regulations expected spring/summer 2019 - meaning that firms should look to revise, embed and test new AML policies and procedures from mid-2019 onwards.
The session was rounded up with a review of the FCA’s recent activity, including the findings from the FCA’s cyber review into firms understanding of cyber risks, effectiveness of second line overseeing (in particular the ability of second line functions to challenge the business on highly technical issues) and whether firms are making the connection between cyber and conduct risk. Key changes to the FCA Financial Crime Guide were looked at as well as recent announcements from HM Treasury in relation to a new taskforce to tackle economic crime.
NCM would like to thank Scottish Financial Enterprise & Addleshaw Goddard for the highly informative and interesting morning.