Our industry is experiencing a steady increase in the amount of regulation that it is required to comply with, accompanied by a move to a regulatory regime based on risk appraisal and principles rather than rules. As a result, senior management are required to spend more time implementing regulatory change and disclosing information, with the added challenge of having to apply their judgement about how some regulation should be interpreted.
This topic originated as a result of increasing pressure in the investment management industry to strengthen corporate governance. For the purposes of this report, this means the need to ensure compliance with regulation and industry guidance, and the need to manage risk to the business across a range of operational areas.
This report allows investment managers to find increased value by streamlining the governance functions of operational risk, compliance and audit. In addressing this, we have considered how functions are organised, whether there is scope for outsourcing, the systems available to provide support, and the help and assistance firms can expect from regulators and trade associations.
This paper enables firms to have a clearer understanding the nature of compliance and operational risk, to provide insight into what it involves and how to tackle it, and as a result to be better placed to shape their own approach to the implementation of effective control functions.
Contact: Clare Vincent-Silk
2.0 The Control Functions
4.0 Operational Risk Management
5.0 Control Functions as an Enabler
6.0 Business Software Applications
7.0 Principle-Based Regulation