Update

Financial Crime

	Crime in the financial markets

Philip Robinson, Director of the FSA's Financial Crime & Intelligence Division, gave a keynote address, on crime in the financial markets, at the 2007 Cambridge Symposium. The speech, a copy of which is available from the FSA website focused on financial crime in general (including market abuse). Mr Robinson stated that: “Poor information security currently stands as the highest scored risk on our own risk dashboard.” He note that the Financial Crime Operations team “has been dealing with an increasing number of significant personal and corporate data loss cases – more than 30 since the start of 2007, and these were without exception due to poor Information Security controls in firms.” Not surprisingly, the FSA has “recently started a major piece of thematic work looking at firms' controls around personal customer data.” Members would, therefore, be well advised to review the adequacy and effectiveness of their controls in this area.

	The Money Laundering Regulations 2007 laid in Parliament

The Money Laundering Regulations 2007, which will implement the Third Money Laundering Directive in the UK, were laid in Parliament on 25th July. The Regulations are due to come into effect, subject to Parliamentary approval, on 15th December 2007.

Further information, including the text of the Regulations and a Summary of Consultation Responses (commodity market participants should, in particular, see para 3.6 and 3.9), is available from the HM Treasury website

	The Money Laundering Regulations 2007: reliance on third parties

As some of you are aware, the reliance provisions in the Money Laundering Regulations 2007, as laid before Parliament, contain an additional requirement for reliance, namely the consent of the person to be relied upon (see Regulations 17(1)(a)).

Together with fellow trade associations, the FOA has met with representatives from HM Treasury to discuss this change, outline the potential issues for give-up and funds business and to explore potential solutions (e.g. the definition of “consent” and the steps firms wishing to place reliance on third parties would be expected to take). We are helping to develop appropriate text, with HM Treasury, for the JMLSG Guidance.

	FSA "good practice guide": authentication and safeguarding of customers' identity

The latest (special) edition of the FSA's Financial Crime Newsletter, focuses "on the issues of authentication and safeguarding of customers' identity." The newsletter includes the findings of an FSA survey, which are "meant to be read as a good practice guide for firms" and what the FSA expects from firms.

Members should also note that:

•  examination of "the controls in firms to prevent data loss" will be one of the Financial Crime Operations Team's main projects this year;

•  the newsletter is "only the starting point within our larger programme on information security..."; and

•  the FSA is stressing the importance of the information/reports it publishes, as well as publications by other organisations with a role in tackling financial crime role e.g.: "...we expect the industry to respond to the intelligence alerts and feedback it is being given. So where we find that firms have not paid attention to reports we've produced and have overlooked the risks we've alerted them to, we will be asking why!"

A copy of the newsletter is available from the FSA website or click here

	FSA Statement of Good Practice: Automated Anti-Money Laundering Transaction Monitoring Systems

The FSA has published a Statement of Good Practice on: Automated Anti-Money Laundering Transaction Monitoring Systems which provides "feedback on good practice, which firms may find helpful to ensure compliance with the new Money Laundering Regulations once they come into force."

A copy is available, please click here

FOA Anti-Money Laundering contacts list

Following a number of personnel changes, we no longer have AML contacts for a number of FOA member firms. If you wish to be added to our circulation lists, please contact Devrim Baki