You are the compliance officer for a Financial Institution situated and regulated in Singapore: Diploma in Regulatory Compliance Assignment, ICTA, Singapore

Question 1.
You are the compliance officer for a Financial Institution situated and regulated in Singapore. Your parent company is situated in London, England. Your office has been suffering a slow decline in sales in recent years. To combat this, the senior management has sent out a new Sales Director from the UK. The Sales Director has decided that to improve sales the firm is to launch a series of new products. The first product being considered would be regarded as a very complex investment product. You are very concerned that, if not appropriately
controlled, such a product has a very high likelihood of generating a substantial number of significant complaints, especially if there is a downturn in the market.

a) Identify, at a high level for now, the scope of a risk management process that you envisage will be required to successfully launch and manage such a product. You may use bullet points here.

b) Having accepted the “risk universe” regarding this launch, the Sales Director has decided to continue. To accentuate the extent of the work involved you should now take each of the bullet points you have identified in a) above and provide the following:

i. A note of the specific risks, risk strategies, and associated controls you will require the various stakeholders to implement.
ii. How you will test and monitor the various stages (if appropriate).
iii. An identification of the stakeholder(s) responsible for dealing with the issues (there may be more than one per bullet point). Stakeholders will include, for example, legal, compliance, risk, audit, sales, and advisers.
iv. How you will inform the various stakeholders of their responsibilities and the activities required of them in applying the risk management processes.

Question 2.
The financial services industry shares a common goal with regulators and law enforcement agencies to work together to prevent money laundering and terrorist financing activities. Regulated firms are required to report suspicious activity.

a) Staff need to be advised as to what type of information is useful to the Money Laundering Reporting Officer and Law Enforcement where suspicion has been raised. Produce a form that may be used to assist staff to provide complete information.

b) Identify the regulatory reporting requirements that relate to the filing of such reports.

c)
i. Currently your firm’s guidance to staff is that they must report any suspicions of money laundering or terrorist financing “as soon as they are confident that their suspicion is justified”. Produce a revised version of this specific part of the policy to help staff by more accurately describing their responsibility.
ii. Articulate a procedure that sets out timelines for staff to deal with suspicious activity with the objective of ensuring timely filing to law enforcement.
iii. Articulate procedures that you will implement to monitor how well staff complies with the new requirements so that you may monitor the success rate and any resource requirements. This would include any Management Information you may require.

d) “Criminal activity is not static; it constantly adapts to find and exploit weaknesses in the financial system. Whilst we strive to ensure that weaknesses do not exist, they do. Each new development in the products and services we offer can bring new weaknesses to be exploited.”. Provide an example of a product or service launched in recent years that presented new challenges in anti-money laundering and/or countering the financing of terrorism.

Question 3.
It has now been six months since you implemented the procedural changes articulated in your response to Question 2. Produce a report for the board that you believe will provide them with the information they require. This would include any measurable improvement and any time/cost savings (you are to imagine and articulate what the results/savings may be in such a project)