CASS Governance in Practice. Sethu Somasundaram 10 October 2017

Transcription

1 CASS Governance in Practice Sethu Somasundaram 10 October 2017

2 What is covered in this session Evolution on CASS Governance Invesco s CASS governance structure 3 lines of defence and CASS The role and the mechanics of our client assets governance committee The Board of Directors role and involvement in CASS 2

3 Evolution on CASS Governance Increased scrutiny over adequacy of CASS governance, oversight and compliance framework Continued FCA focus on three lines of defence Senior Managers Regime ( SMR ) provides significant impetus for banks; will be applicable to investment firms soon Framework for responsible person to discharge their responsibilities Individual accountability CASS Governance timeline Dear Compliance Officer letter issued Introduction of CF10a function PS14/09 issued SMR came into force New CASS Assurance Standard emphasis on governance Dear CEO letter issued 3

4 Evolution on CASS Governance (CONTINUED) CASS Assurance Standard Widening scope of CASS audit Auditor to evaluate following elements of control environment: Governance Integrity and ethical values Competency levels and Authority and responsibility Auditor required to consider CASS governance and culture Management s maintenance of a culture of honesty and ethical behaviour Governance over assessment and ongoing review of control framework 4

5 Legal Invesco s CASS governance structure Third Line of Defence (Governance) IFML Board Internal Audit Second Line of Defence (Control Functions) Risk and Compliance CF10a CMAC First Line of Defence (Management Control) Head of Client Assets CASS Team Operational Procedures Third Party, Service Providers Oversight Staff Training and Focus CMAR CASS Resolution Pack Co-ordination of FCA Audits Breach Analysis Bank Due Diligence Oversight of CASS processes CASS 7 CASS 8 CASS 9 Retail DST Bank Industry led courses/ workshops attended Internal CASS Assessment for CASS teams 5

6 The role and the mechanics of our client assets governance committee The Board has overall responsibility for CASS but has taken advantage of the power given in its own Terms of Reference to delegate the oversight of day to day CASS activities to the Client Money and Assets Committee (CMAC) The CMAC has authority from the Board to undertake any activity and make such decisions as are necessary to achieve the CMAC s purpose. For matters which the Board cannot delegate, such as prudent segregation, the CMAC may make recommendations to the Board 6

7 The role and the mechanics of our client assets governance committee (CONTINUED) 7 Key areas we considered on our CMAC Terms of References Attendees Standard agenda items include Management information; particularly around breaches, CMAR trend analysis, Results of our third party oversight activities during the month, funding requests Policies and procedures annual review, changes and material updates Any CASS projects updates CASS risk (analysed quarterly) and steps to address them effectively Gone away tracing activity Compliance monitoring report Internal and external audit report Business Changes Impacting CASS Industry Developments in CASS Weekly attestation by separate business areas (cover CASS RP, policies, new business) TCF / Conflicts of Interest CASS RP updates Bank due diligence Consultation papers and policy statements impact on our operations Meeting minutes

8 The Board of Directors role and involvement in CASS The CF10a will provide a regular report to the Board showing: Key management information; Major project updates which may potentially affect client money and asset protection, including any changes to scope; FCA immediately reportable breaches; Significant process changes; Prudent Segregation policy updates for approval; Material changes to the client money and asset regulatory requirements, proposed and actual or related guidance and thematic reviews; Any issues relating to bank due diligence or diversification; Staffing challenges; Summary results of reviews by internal and external auditors, compliance and other consultants; Outsource provider performance summaries in relation to CASS; Any other items of which it feels the Board should be made aware; and Industry updates and FCA CASS enforcement notices 8

9 Questions? 9

10 Thank You