FATCA Update

Firms with US clients have until the end of this month to register with HMRC / IRS under the US Foreign Account Tax Compliance Act (“FATCA”).

Once registered, firms will receive a Global Intermediary Identification Number (“GIIN”). This will enable them to report going forward.

Firms need to tread carefully here. For example, you may think you have no US clients – but beware that the definition of a US client is very wide. And beware of any US clients located in the US – you may be providing them with an investment service requiring you to be authorised in the US.

Our advice to firms on this matter has been that they should seek specialist advice on what is a highly complex area.

Client Money: new rules

At the time of writing, FCA had just issued the new final rules on client money.

We will be reviewing these with clients to make sure that they are fully compliant.

It would be a crime…

Have you seen the recent BBA (British Bankers Association) guide to their members on aspects of financial crime?

This useful publication (“Anti-Bribery and Corruption Guidance”), released in May and accessible on their web site BBA Guidance focuses on the controls that their members need to have in place to counteract bribery risk. Helpfully, the guidance also refers to other financial crime risks that all FCA regulated firms face. As such it complements FCA’s own publications “Financial Crime, a guide for firms”, re-released in April last year.

The BBA point out that the risk that regulated firms face is not one of being involved in a financial crime – even unwittingly. The greatest risk remains enforcement action by the FCA, who may make a judgement that the firm’s procedures are inadequate for what FCA perceives to be the risk the firm faces.

Given this, and given FCA’s continued focus on financial crime, it would indeed be a crime for regulated firms not to review their own policies and procedures in this area. Fulcrum Compliance will be reviewing clients’ financial crime policies to ensure that they address the issues the firm faces – be they money laundering, market abuse, IT security or general fraud prevention – to ensure that they have a first-base level of evidence that describes their processes in this area.

Cyber crime

It follows from the above that firms will want to consider their defences against cyber crime.

Cyber crime is on the rise, and FCA are becoming increasingly involved in an area previously seen as outside their sphere. Indeed for compliance officers outside major banking groups, cyber crime can be something of a closed book, an area of firm risk regarded as being more within the domain of IT professionals.

We understand that FCA will within the next two years be issuing guidance to all firms as to their expectations in this area. This will be the cue for all firms to carry out gap analysis on their systems and generally spend time – and money – on the issue.

In the meantime, a good starting point is the Department for Business, Innovation & Skills’ 2012 document “10 Steps to Cyber Security”, available on their site: BIS.

Fulcrum Compliance will continue to work with clients to ensure that key areas of IT security are in place.


The publication of the final versions of the EU Directive and Regulation, along with the ESMA’s consultation paper, marks the beginning of a possible two year process to late 2016, when the resultant rules will have to be implemented in the UK.

MiFID II is something of a buffet – a collection of somewhat disparate dishes, linked by an overall theme, from which firms will need to select those that affect them. It’s unlikely that you’ll want it all, but you’ll need something.

Firms will need to start thinking about the potential implications of having to re-paper counterparties as customers, and the requirements on best execution and suitability for retail clients may turn out to require firms to further adapt their systems.

In the meantime, Fulcrum Compliance will continue to try to make the forthcoming banquet as digestible as possible.

Association of Professional Compliance Consultants (APCC)

We are pleased to report that Fulcrum Compliance Ltd was recently admitted to the APCC.

See us on their web site here: APCC


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