The Compliance Manual The Basics and Best Practices

1. The Compliance Manual The Basics and Best Practices BVI Association of Compliance Officers Presented by Helen Marquis BVI Financial Services Commission Date: 8 October 2019

2. Overview Statutory Requirement to Maintain Compliance Manual The Purpose of the Manual The Regulatory Framework Description of the Business Organization Chart Key Elements of the Compliance Manual

3. Legislation • Financial Services Commission Act, 2001 • Regulatory Code, 2009 • Anti-Money Laundering Regulations, 2008 • Anti-Money Laundering and Terrorist Financing code of Practise

4. Financial Services Commission Act, 2001 Under Section 34 of the FSC Act, every regulated person shall establish and maintain a manual of compliance procedures, the implementation of which shall be overseen by the Compliance Officer.

5. Regulatory Code, 2009 Section 45 (1) (a) (iv) requires the Compliance Officer to establish and maintain a compliance manual required by section 34 (2) of the FSC Act that complies with section 46 and keeping the compliance manual under regular review and current.

6. Anti-Money Laundering Regulations, 2008 Regulation 3(3)(a) of the Anti-Money Laundering Regulations requires a relevant person to maintain Identification procedures, record keeping procedures, internal reporting procedures and internal controls and communication procedures that complies with sub-regulation (1) (a) and shall be submitted –in the case of a relevant person that is regulated by the Commission, for the approval of the Commission;

7. Anti-Money Laundering and Terrorist Financing Code of Practice Section 11(1) requires that an entity or a professional establish and maintain a written and effective system of internal controls which provides appropriate policies, processes and procedures for forestalling and preventing money laundering and terrorist financing.

8. The Purpose of the Manual Comprehensive reference point Depends on nature size and complexity of the business Applicable regulatory framework

9. The Regulatory Framework Summary of legislation

10. Description of the Business What is the Business ? Investment Banking Money Services Fiduciary Services Insurance

11. Organisation Chart Who is responsible for various procedures and tasks The compliance reporting structure

12. Requirement of the Manual The purpose and importance of the compliance function The role of the compliance officer and any compliance committee that may be established and how the compliance function is to be monitored and reviewed(section 45). A description of the business undertaken by the licensee, including risk management systems in place

13. Requirement of the Manual Cont’d An organizational chart clearly indicating who is responsible for various procedures and tasks and a description of those tasks and compliance reporting structure A description of the regulatory framework insofar as it is relevant to the licensee and of the regulatory obligations of the licensee.

14. Requirement of the Manual Cont’d The procedures that will be used to test compliance and how breaches in compliance will be reported and rectified. Internal Policy, Systems/Procedures and Controls in place to assess effectiveness in managing risks, approval of Policy by Board on an annual basis and forestalling and prevention of money laundering and terrorist financing

15. Requirement of the Manual Cont’d Requirements and Procedures to engage in Customer Due Diligence (“CDD”). Risks associated with failure to apply KYC, Client Acceptance and CDD measures, intermediaries and external service providers should be identified. Provide appropriate measures for the identification of complex/unusual large/large patterns of transactions having no visible economic or lawful purpose.

16. Requirement of the Manual Cont’d Procedures for reporting suspicious activities (internal) Explanation of the offences and penalties that may arise from breach of responsibilities. Testing of employee’s awareness and understanding regarding AML/CFT training. Audit function to test compliance include sample testing of written system of AML/CFT controls- External and Internal Audits

17. Additional Requirement of the Manual Record Keeping Training and Recruitment Significant Complaints Handling Business Continuity Plan Information Systems

18. The Role of the Compliance Officer Section 45 of the Regulatory Code 2009 Sections 34(3) (a) and (b) of the FSC Act Functional responsibility for compliance Required to report serious compliance breaches to the Commission Identify , measure and assess compliance risks Keep regulatory obligations of the licensee and compliance systems and controls under review Establish and maintaining a compliance manual and keeping it under regular review and current Prepare the Annual Compliance Officer Report

19. The Role of the Money Laundering Officer Section 18 of the Anti-Money Laundering and Terrorist Financing Code of Practise (AML/CFT) Sections 13(1C)13(2) of AMLR, section 16 of the AM/CFT Mandatory reporting requirements for SARs/STRs Required to receive and maintain records of SARs/STRs and filing SARs/STRs with the FIA Act as a liaison between the Agency in matter relating to POCCA, the AML/CFT. The MLRO may serve as Compliance Officer with the Commission’s approval.

20. Procedures to Test Compliance Who What When

21. Questions?