Financial Services
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ASIC & APRA Risk Management and Internal Control Requirements
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The introduction of the Financial Services Reform Act and recent changes affecting APRA regulated entities such as Life and General Insurers, ADI’s and Superannuation Trustees have changed the landscape within which financial services organisations now operate.
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A key feature of these new regimes is the requirement that all financial services entities establish a sound system of risk management and internal control. The depth of these requirements has been explained in various ASIC and APRA publications with ASIC referring to the Australian Risk Management Standard (AS/NZ 4360:2004) and the Australian Compliance Standard (AS 3806:1998) as relevant benchmarks.
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To add to the challenge, financial services companies are now also required to maintain adequate human resources, technology resources and financial resources as well as closely monitor key outsource relationships and implement conflict of interest policies. Those dealing with retail clients are also required to implement internal and external complaints handling systems.
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The focus of these changes has been on documentation and practical implementation of policies and procedures. To date many financial services companies have gotten by with manual, paper based systems, however the sheer complexity of the regulatory environment, and the demands of managing effective risk and internal control programs have now made this approach largely untenable.
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Simply put, it is now both a legal and a commercial imperative for financial services organisations to establish internal risk and compliance programs that work effectively and Nova Solutions™ provides the perfect solution.
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General Law Obligations
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As an executive of a financial services company not only do you have to deal with a volume of specific laws and regulations relating to the financial services industry, you also have to deal with a vast body of general legislation, which in Australia is growing at the astonishing rate of 10% each year.
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Occupational health & safety, workers compensation, privacy, industrial relations, and consumer protection laws are just a few of the areas that are likely to impact on your business on a day-to-day basis.
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We recognise that many financial services companies are small-to-medium-sized enterprises that are focused on their core product or service offering and often have limited resources available to dedicate to:
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- tracking their legal obligations
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- translating them into documented policies, and then
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- effectively communicating these policies to their employees.
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It is, in fact, the small and medium sized enterprises in Australia that bear the brunt of costs associated with non-compliance. Fines, penalties and legal fees are just the beginning. The real costs of non-compliance are often hidden and include management downtime, business disruption, reputational damage, loss of key staff and increased insurance premiums.
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As a financial services company the pain is often multiplied by the fact that you are “under the regulator’s spot light”. Compliance breaches can become public with resulting reputational damage having the potential to negatively impact on your business.
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