‘Regulatory iceberg’ sinks compliance efforts
Despite the perception of stability in the financial services regulatory environment, constantly changing regulation and reporting requirements are affecting the efficacy and longevity of compliance programs.
The Australasian Compliance Institute (ACI) has now moved to examine the issue, with chief executive Martin Tolar announcing the organisation is currently preparing a white paper that looks at compliance within a bear market situation.
Speaking at the ACI Sector Forum, Ernst & Young executive director of compliance and regulation Anthony Philpott said being able to effectively manage the impact of regulatory change on an organisation’s compliance program has become increasingly important, particularly with respect to the current volatile market environment.
“Managing legislative and regulatory change effectively and efficiently is vital for the commercial success of an organisation,” he said.
“A compliance program should be designed to be robust and flexible enough to accommodate any legislative or regulatory change, no matter how small or large.”
Philpott said this was most evident in financial services, one of the most heavily-regulated sectors in the economy.
“You only have to look at the number of regulators currently operating; the Australian Securities and Investments Commission, Australian Prudential Regulation Authority, Australian Securities Exchange, Australian Taxation Office, AUSTRAC, Australian Competition and Consumer Commission, and that’s just the tip of the regulatory iceberg.”
ANZ executive manager of group compliance John Argiro said consulting widely, particularly within the compliance community when designing your program, is key.
“Consultation also promotes confidence in the integrity of the compliance program throughout the organisation and to the regulators. It also promotes awareness, opportunities to leverage and reduces duplication amongst supporting functions, including group legal, government relations and corporate secretarial,” he said.
Argiro said organisations needed to develop relationships with key regulators and formalise their regulator engagement programs.
“It’s important to develop clear understanding on who the regulators are and their expectations, as it enables you to better anticipate and prepare for upcoming legislative and regulatory impacts to your business,” Argiro said.
AUTHOR
Mike Taylor
Recommended for you
With regional and rural suburbs exhibiting high spare capacity to invest, Money Management speaks to three regional advisers on the opportunities beyond the major cities and the importance of a strong network.
Platform consolidation is expected to accelerate among financial advisers this year, as software company Finura pinpoints which two platforms are set to be the winners, thanks to this trend.
The software provider has made several appointments in its APAC wealth propositions team, with a focus on driving growth across digital advice, Xplan and strategic partnerships.
The platform has announced it plans to close its Xplore managed discretionary account service in 2026 which holds $2 billion in funds under administration.
