Do US Compliance regulations play a part in the UK ?

As a UK vendor of compliance software I get increasingly annoyed at how most news worthy articles I read on the web referring to compliance and regulations constantly refer back to US legislation.

Its almost as if the UK does not have to comply to legislation. Certainly the "does not live here" attitude from many UK Compliance Managers I meet should consider the more subtle British way of introducing change.

I wrote in my blog of 30th September that the onus of responsibility has changed in the UK for Health and Safety issues. Indeed, not only are line managers more accountable for health and safety issues, the concept of innocent until proven guilty in a legal situation appears to have shifted to that of prove you have complied.

Irrespective of the lack of legislation within the UK towards Corporate and Information Governance the trend is toward individual responsibility,but when does responsibility become culpability.

Back in the early 1970's VAT was introduced to the UK. Suddenly, all those business owners who traded over the stated threshold became instant tax collectors and responsible for completing quarterly returns and submitting these along with the tax collected. Anyone to this day who does not carry out this function is liable to receive fines and possibly a custodial sentence if deemed appropriate. Is this a responsibility or culpability?

Fast forward to the changes in the UK licencing regulations in the middle of this decade. Each licensed establishment is now required to assign a designated premises supervisor who holds ultimate responsibility for the running of that premises. This includes health and safety, enforcing anti social behaviour laws and bye laws both within and immediately outside of the designated premises, non smoking rules, stopping under age drinking, stamping out drug abuse, etc.

These are not bad things to try to address but when does the responsible bar owner go from being responsible to culpable.

More importantly for this article when does the law support those responsible rather than use them to apportion blame and liability when it comes to issues involving legislation and Corporate Governance.

How can an organisation and individuals working within those entities ensure they are acting responsibly and endorsing policies and procedures rather than appearing culpable to a wider audience.

The answer lies within the such legislation as Sarbanes Oxley, Basell II, HIPAA and the like all be them US law. All these acts were delivered to help support the use of properly managed processes, probably utilising technology to show good corporate practice within each Acts specified area.

Rather than review such news items that quote US legislation with an attitude of "it does not fit here", personnel operating within UK organisations should consider the shift of emphasis in this country from "innocent until proven guilty" to "proof of compliance".

The use of technology really can make a difference and I am particularly proud to sell jComply our policy and procedure management solution. This application is designed to support all people within an organisation understand, meet and then deliver responsibility be it in health and safety, information security, corporate governance or best practice.

Visit http://www.jcomply.com/

Testing results of jComply beta 1.0

Over the past two months, jComply Beta 1.0 has undergone some rigorous testing schedule. Apart from our ongoing in-house testing, we have worked with industry professionals, consultants, compliance and risk managers from the financial, healthcare and pharmaceutical sectors to carry out detailed functionality testing of our policies and procedures management system. These efforts have resulted in bringing out issues/bugs and a number of recommendations to further improve our product. The issues were logged in our issue management system and are being traced to resolution. The recommendations on the other hand have been absorbed in our development roadmap.

I am therefore thankful to all those who have participated in our testing so far and can’t wait to work with individuals who are scheduled to test our releases in the coming months.

jComply, a policy and procedure management system is expected to be released next month. To learn more about jComply, visit www.tabaqsoftware.com/jcomply

or

to register for a free no-obligation demo, fill up the form at http://www.tabaqsoftware.com/registration.html.

Collapse of Lehman Brothers - Is the worse yet to come?

The collapse of Lehman Brothers is so huge that I feel compelled to write my two bits. The financial markets have suddenly plummeted overnight and most of the positive thinkers like me are hoping that this is the deep end of it and it will not get any worse. Will it get better from here onwards or is the worse yet to come?

Fingers are pointing at US with concern and some people on this side of the Atlantic are probably worrying what this situation has to do with them. In simple terms, companies like Lehman Brothers used to lend money to high street banks. High street banks then had the liquidity or cash to lend to mere mortals like us. Now, if the high street banks are not going to raise money easily, they will have difficulty lending it to us. In UK, the situation is already bad and the property market is infected with high interest rates and negative equity which is deterring people from buying.

Well, the outlook is certainly not good. There are rumors that the insurance giant AIG could be next in the financial crisis. Banks are anticipating the next two weeks to be volatile, lets see what happens. Investors who have the holding capacity are advised to not panic and think long term. Stay away from high risk investments! You are better off leaving your savings in fixed deposits.

Tabaq Software Ltd is a developer of enterprise compliance solution, jComply which can help heavily regulated sectors like finance, pharmaceuticals, healthcare, airline, etc. to comply with regulations and their internal policies and procedures. The first release of jComply is expected in October 2008. To learn more about jComply, visit http://www.tabaqsoftware.com/jcomply.

Falling standards in UK healthcare

It is not very encouraging to see that some of the prominent hospitals in UK have shown below par hygiene standards in recent years. NHS body Health Facilities Scotland produced a report last year which showed three of the Scotland’s leading hospitals not meeting the hygiene standards. NHS Watchdog and the Healthcare Commission have produced reports in the past two years highlighting various levels of falling standards.

Where are these falling standards taking us? According to the Patients Association, the general views shared by patients about NHS service are long waiting periods, delayed appointments, fear of filing complaints and confronting the doctor, office hours only, etc. Instead patients ought to be treated as customers and stakeholders.

For once globally renowned and exemplary British NHS service, up to-date and technologically advanced tools are required to give fair judgement to the assessment criteria. In that respect, it was a relief that NHS decided to part with the star rating system for the hospitals which was more synonymous with giving stars to children in schools. For the first time, last year NHS trusts assessed themselves against 44 quality standards of basic competence. According to the health inspection body, only third of the country’s 570 trusts met the standards, which include safety, governance and patient focus.

Thankfully, developments in technology have given us the ability to develop systems that can help the trusts implement these standards across the board and certify themselves. Read more about jComply and how it can help with your compliance process at jcomply.com.

What is KYC and what does it stand for?

To enhance my knowledge on the subject I engaged in a few discussions with some professionals on KYC. I realized that very few people have detailed knowledge on the subject. Given the increased need for the implementation of KYC, I decided to share some basic information on the subject.

The term KYC – Know Your Customer means that financial institutions such as banks and insurance companies are obligated to record information on their customers and to check the plausibility of the information entered. The basis for KYC is endorsed by Article 8 of the 3rd EU Anti-Money Laundering Directive, 12.5 of the Banking (General Practice) Regulatory Code under the Banking Act 1998 and 6.1 of the Financial Supervision (Conduct of Business) Regulatory Code under The Investment Business Act 1991 for UK.

KYC consists of two parts; Customer Identification Program (CIP) and Enhanced Due Diligence (EDD). CIP consists of collecting basic evidence on customer identification information such as utility bills, driver’s license, passports etc.

EDD goes further to adopt a risk based approach and demands financial institutions to identify the risk a customer represents, validate those risk categories and demonstrate effective customer due diligence to the regulator. The source of funds that are utilized as part of the business relationship and/or transaction as well as their intended use also must be determined. In the event that the source of the funds is not clear the financial institution must observe due diligence in carrying out a risk base assessment on the customer profile.

In an ideal situation this information is stored electronically in the “Know Your Customer” profile (KYC profile). Due to rapid globalization financial institutes all over the world should stress on KYC, keeping track of customer movements, risk assessment and profiling across borders. Breach of KYC and AML rules and regulations can result in serious penalties by the regulators.

Anjum

03/12/07