Guest post: Do you need to brush up on regulatory compliance jargon?

May 20th '19

The world of the regulatory Compliance professional is a complex one.

Legislation is constantly changing, best practice evolves and new approaches take effect. Keeping up with the demands of your role can be a constant challenge.

You need to maintain an understanding of the regulations and guidelines that govern your sector. You have to keep abreast of your regulators’ priority areas, as these will doubtless filter down into new rules and requirements.

Doing this isn’t made any easier by the huge amount of terminology and jargon used in the financial sector.

While every industry has its own terminology and acronyms, the amount and complexity of jargon used when talking about financial regulatory compliance takes some beating.

The terms used, the complexity of the language and the very nature of compliance – the need to define terms with absolute clarity for avoidance of ambiguity – mean that when it comes to jargon, financial compliance is pretty much unmatched!

The challenge for Compliance teams

Whether you are looking at customer communications, financial promotions or the operational aspects of your business, you will need an in-depth understanding of the terms that the FCA use to define good governance and required processes.

If you are new to the world of regulated finance, it’s vital that you quickly get up to speed with the terminology used. And the constantly-evolving nature of regulatory rules and approaches means that, even if you’ve worked in a Compliance role for years, there are always new words, terms, definitions and regulations to be aware of, so a refresher is always welcome.

First off, you need to familiarise yourself with the regulator’s financial promotion rules. And a big part of this is understanding the terms used to talk about promotions and their approvals process.

Some of the terms used by the regulator appear again and again. The FCA is keen to ensure that promotions are clear, fair and not misleading; knowing what this means is key.

Likewise, all Compliance teams need to understand the regulator’s definitions of, and requirements around:

  • fair treatment of customers
  • the suitability of promotions
  • disclaimers and disclosures, and
  • prominence

Understand the sector’s terminology to ensure you’re compliant

If you want to ensure your firm avoids regulatory compliance breaches, getting to grips with the sector’s jargon is vital.

Here are some tips to help:

  • Get to know the way the FCA speaks, and what it cares about. At the heart of many of the regulator’s requirements is a desire to deliver better outcomes for consumers and clients. Having an understanding of the Authority’s objectives will help you to decode its rules.
  • It’s not just the Compliance team that needs to familiarise themselves with regulatory rules and requirements. Your Marketing team is central to your financial promotions; operational teams may draft customer communications or policies; your Sales and Adviser colleagues produce pitch documents, proposals and client materials.

Help your teams to understand what the various regulatory terms and phrases mean, and how to ‘translate’ them into compliant content. Work with them to explain what’s needed, so they can write copy you’re able to approve first time.

  • Keep on top of the demands your regulator makes of you. Rules change; new terminology comes along. Keeping abreast of the requirements is key. Already in 2019, we’ve seen the FCA issue final (to date) guidance on Brexit and take over regulation of the claims management industry. The regulatory landscape is ever-changing, and brings with it new terms and acronyms to familiarise yourself with.

In a regulated industry, compliance matters and it’s vital that your approach is up to scratch.

Hopefully these suggestions above will help. And if you would welcome a reminder of any compliance jargon, you can download a copy of Simplifie financial compliance glossary. The glossary is free and you can download your copy from here.

Nothing in this document should be treated as an authoritative statement of the law. Action should not be taken as a result of this document alone. We make no warranty and accept no responsibility for consequences arising from relying on this document.

Source: Simplifie.

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