Collaboration a Key to Regulatory Challenges in Compliance

    LONDON, ENGLAND, June 11, 2011 /24-7PressRelease/ -- ..However, City professionals and the entire financial sector face many key regulatory challenges in the months ahead.

Chief amongst these will surely be the break-up of the Financial Services Authority in 2012. The regulator is to be replaced by the PRA (Prudential Regulation Authority) and the FCA (Financial Conduct Authority) who will jointly take on regulatory power in the City.

Michael Page Financial Services asked City compliance professionals what steps they thought the new bodies should take to maintain stability and ensure ethical practice throughout the marketplace.

Respondents to our Compliance Insight and Trends Survey 2011 believe the new regulators should:
- "Become more effective at prosecuting serious financial criminality," non-executive director.
- "Provide direct answers to direct questions," European head of compliance.
- "Be more collaborative rather than trying to catch business out. They're creating unnecessary work rather than being constructive," compliance officer.
- "Hire staff who are intelligent and experienced but are prepared to listen. They will need to pay them more," director.
- "Stop political appointments," consultant.
- "Understand the businesses they're supposed to be regulating rather than use one-for-all rules that are pointless," financial risk officer.
- "I actually think they do a good job on the whole," senior compliance officer.

The City's thoughts on bankers' pay
Michael Page Financial Services also quizzed our compliance candidates on whether they thought the FSA's Remuneration Code would be a stimulus towards a general consensus on bankers' pay worldwide? The answer was a resounding "NO".

The FSA's Remuneration Code is designed to end the practice whereby bankers received 100% of their annual bonus in cash, common before the banking crisis. The code states that 40% of a bonus must be deferred for at least three years, which can rise to 60% in certain cases and that at least 50% of any bonuses must be paid in shares or other non-cash instruments.

Some respondents expressed concern however that the code would place London at a disadvantage to other locations seeking to establish financial centres. Also, that it may further attract talent away from the UK to existing financial centres.

However, whilst some of our more experienced candidates have taken advantage of lower tax or tax free, child-friendly environments overseas in the last 18 months, a mass exodus of talent is highly unlikely. The UK market has a great deal to offer in terms of opportunities within compliance and this will remain the case for some time to come as regulation continues to increase.

What's on the horizon?
There is an all-encompassing MiFID Review on the way, changes to the MAD regime (broader scope to cover MTF traded instruments and provisions for the gas and electricity markets), the new proposals for position reporting/transaction reporting and RDR to come into effect next year. And on top of all this, every head of compliance will have to deal with the perennial challenges of attracting, developing and retaining adequate resources.

Lindsay Reid, compliance specialist for Michael Page Financial Services summed up the feeling in the industry: "In terms of opportunities, there has perhaps never been a better time to consider becoming a specialist in any of the disciplines in compliance. We will see change and an adoption of new business practices, which will be embraced by some quicker than others but with compliance a key subject in the sector, getting up to speed will be a key to success. Time will tell if the new regulations will have a direct impact on London being an internal centre. In our opinion, this will not be affected in the short and medium term."

Michael Page Financial Services is one of the world's leading recruiters for investment & banking jobs. We have offices in every key financial hub globally. We source the most sought after candidates from across the globe for clients seeking to hire only the very best talent. Our approach is to work closely with our clients and candidates, developing long-lasting relationships that build trust and exceed all objectives.

For more information, please contact Lindsay Reid on 020 7645 1432 or email: [email protected].

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