Managing the compliance of contractors

Managing the compliance of contractors

AU Energy Compliance, Financial Services
Start with a risk assessment. A risk assessment is a means of identifying the risks that your business faces and assessing the likelihood of them occurring. It also involves determining the controls you currently have in place to manage those risks, as well as whether or not any additional controls are necessary. When you are considering if your contractors are a compliance risk, look at their role, responsibility, applicable regulatory penalties and existing controls. We've looked at the need for more comprehensive risk assessments in previous posts, if you don't have sufficient resources to conduct such an assessment consider hiring a third party to do so. The formality of the controls should depend on the risks. There are no hard and fast rules. You should design controls to achieve your…
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When should you hire a compliance manager?

When should you hire a compliance manager?

AU Energy Compliance, Financial Services
If you're wondering if it's time to hire a compliance manager, ask yourself how often you think about regulatory compliance and whether your business is across all regulatory obligations with appropriate controls in place. If the answer to the last question is not enough or no, it may be time to take on such an employee. A dedicated compliance manager can immediately free up precious time for other members of senior management by taking on the compliance burden. With a specific person tasked with staying up-to-date on regulation changes, communicating new requirements and emerging issues, developing and implementing policies and procedures as well as conducting routine audits, you'll have more resources to focus on growing your business. You know you need a compliance manager when... You want to avoid penalties…
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Investigating Regulatory Breaches

Investigating Regulatory Breaches

AU Energy Compliance, Financial Services
For an executive within an energy business, identifying a regulatory breach can be a gut-wrenching experience. Being told that your business has inadvertently breached the law, understandably raises concerns about the impact of the breach on your customers, stakeholders, and reputation. The obligation to report Businesses in various industries have obligations to report potential breaches to regulators. A failure to report a breach can itself be a breach, and such a failure will generally make matters worse. So businesses, including energy retailers, need to have clear processes in place to identify, assess, and report on potential breaches. Mandatory reporting obligations are found in various industries. Energy retailers operating in National Energy Customer Framework, for example, have reporting obligations under the AER's Compliance Procedures and Guidelines and further under s 273(2)…
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An Alternative to Compliance by Coercion

An Alternative to Compliance by Coercion

AU Energy Compliance, Financial Services
Traditional mechanisms used by both government and private enterprises seeking to increase compliance focus on penalties as disincentives. Penalties take a variety of forms, including fines, loss of licence, and enforceable undertakings. In this post, we examine an alternative- focused on behavioural psychology and ‘nudge theory.’ Penalties as a compliance tool The belief that greater penalties will result in greater compliance assumes that regulated entities operate under a decision-making model which perfectly takes into account both the costs and benefits of each decision made and that resources required to ensure compliance are not limited.  Neither assumption is safe. The public’s responses to COVID-19 public health measures provide a perfect case study for the need for more sophisticated responses to encourage compliance. With fines in NSW increasing, have we seen greater…
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The use of Machine Learning in Compliance

The use of Machine Learning in Compliance

AU Energy Compliance, Financial Services
The regulatory environment is evolving at a lightning pace. As a result, compliance officers must also keep up. To meet this challenge, AI applications have become more capable, particularly in regards to providing answers that are easy to interpret. As you might imagine, using an AI-powered system to process this data would be incredibly valuable for companies in a variety of fields—from financial institutions to insurance companies to tech firms. In compliance, the goal is to ensure regulatory compliance by identifying, evaluating and responding to regulatory requirements. The work can be challenging; firms and individuals often work in an environment without sufficient information to effectively meet goals and objectives. As artificial intelligence and automation become more prevalent in the world, it’s imperative that firms continue to utilize compliance know-how in…
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ASIC’s report on regulatory technology

ASIC’s report on regulatory technology

AU Energy Compliance, Financial Services
The Australian Securities and Investment Commission (ASIC) has published a report (Report 685) on ASIC’s Regtech initiatives during 2019-2020. We’ve spoken previously about the benefits of advanced software when it comes to regulatory compliance. Compliance processes are generally complex. They have many moving parts, and the amount of time and money required to enact processes can be high. Compliance management systems such as the Compliance HUB can simplify these processes and save a business both time and money. The ultimate aim of products such as the Compliance HUB is to embed compliance into decision-making. Compliance management software can simplify compliance processes by streamlining and simplifying tasks, eliminating redundancies, and improving efficiency. For example, automation can be used to automate the review and approval of large quantities of documents. This frees…
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Should Your Business Invest in a Compliance Management System?

Should Your Business Invest in a Compliance Management System?

AU Energy Compliance, Financial Services
Businesses around the world face challenges in managing regulatory compliance. Compliance requirements and the regulatory environment are constantly changing and there is no 'one-size-fits-all' solution. Companies are constantly faced with a balancing act between the risk of not complying with rules and the cost of having to comply with the rules. Companies are not the only ones that are affected by these challenges. They have a huge impact on the public sector and the general public. When it comes to investment in software, businesses typically start with a customer relationship management system and then sales and marketing software. Traditionally, compliance software is not considered a priority. Many businesses use excel spreadsheets to track their regulatory obligations. And yet, with the potential cost of non-compliance, is that an adequate approach? As…
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Spot the difference: Legal vs Compliance

Spot the difference: Legal vs Compliance

AU Energy Compliance, Building and Construction, Consumer, Financial Services, NZ Energy Compliance
Many large businesses have both in-house legal teams and compliance teams. What is the difference between the two and how do you know if you need a legal or a compliance professional? The role of an in-house legal team Of the two, the role of an in-house lawyer is probably more easily defined. Their role involves managing legal risk and providing legal services that support business growth. On a day-to-day basis, this includes reviewing contracts, interpreting the law, managing disputes and litigation, managing employment law matters, and providing legal advice on areas such as privacy law. In-house legal teams are staffed by qualified lawyers and are typically supported by external law firms engaged on panels. Having an in-house lawyer can be a very good investment for a business seeking to…
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Are You putting Your Business at Risk with inadequate Compliance Controls?

Are You putting Your Business at Risk with inadequate Compliance Controls?

AU Energy Compliance, Building and Construction, Consumer, Financial Services, NZ Energy Compliance
History is littered with spectacular compliance failures; from Eron to WorldCom and the shocking findings of Australia's recent Banking Royal Commission. And yet, we can expect more compliance failures to come. Which begs the two questions- why is that and what can be done about it? In reality, compliance is often seen as an afterthought by business leaders and founders. While founders want to grow innovative and successful businesses, the truth is that a founder’s first priority should be not just building a great company, but on building a great company that can last. Compliance is Critical to the Longevity of a Business While regulation and compliance don't exactly scream "sexy," they are crucial to the longevity of a business [for an interesting article on how to make compliance more…
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A summary of regulatory requirements for statements of advice

A summary of regulatory requirements for statements of advice

Financial Services
As noted in our previous article, a statement of advice is the main document that records advice provided to retail clients. The advice process Individuals obtain information about financial products in a variety of ways and in a variety of settings. An individual may talk to friends and family, their lawyer, their accountant and others who they trust when considering a financial product. Where advice is sought from a financial advisor, a financial services guide (FSG) will typically be provided to a client in the first meeting between the client and advisor. A statement of advice (SoA) will then either set out the advice or record the advice that was given. If the statement of advice is not itself the means by which advice is provided, then it must be…
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