Webinar

The Hong Kong Securities and Futures Commission (SFC) recently sanctioned a former chief executive officer of China Rise Securities Asset Management Company and suspended its head of dealing for inappropriate standards of conduct and breaching of the Code of Conduct.

Risks might be blindingly obvious once in front of you, but they do not often occur to people beforehand. That is why is so important to understand what conduct risk means, identify the risks and drivers to protect your businesses and ensure markets remain clean.

In the face of the COVID-19 pandemic, protecting vulnerable consumers is a regulatory priority. Recently, the SEC has emphasized the need for maintaining market integrity and following controls and procedures. In addition, recent SEC and FINRA actions have shown that enforcing conflicts of interest remains a priority and conduct risk-based inspections will continue to advance.

Gifts and entertainment compliance can be difficult to handle but they are an essential part of business relations for many companies. We all agree it helps to improve business relationships. However, gifts and entertainment can also create compliance risks such as bribery for government and politically exposed persons, inappropriate influences from vendors, violations of the policies of third parties and manipulation of laws and regulations. That's is why it is so important for the compliance team to understand and mitigate the risks. 

Addressing Conflict of Interests (COI) that can have an outsized impact on the overall efficacy of a firm’s compliance and ethics program should be a top priority. The danger of poor COI mitigation is not only the immediate impact from individual COIs but also a broader risk to the entire program.