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/
Tuesday, 6 October 2009
Wednesday, 30 September 2009
Line managers Health and Safety Responsibility.
In June 2008, new legislation was released that increases penalties and provide courts with greater sentencing powers for those who flout health and safety legislation.
The legislation was changed as it is generally recognised that the level of fines for some health and safety offences are too low. The changes will ensure that sentences can now be more easily set at a level to deter businesses that do not take their health and safety management responsibilities seriously and further encourage employers and others to comply with the law.
The Health and Safety (Offences) Act 2008, will increase penalties and provide courts with greater sentencing powers for those who flout health and safety legislation.
The Act raises the maximum penalties that can be imposed for breaching health and safety regulations in the lower courts from £5,000 to £20,000 and the range of offences for which an individual can be imprisoned has also been broadened.
The Act, which covers Great Britain and Northern Ireland, came into force in January 2009.
The main points of the Act are;
Increasing penalties and providing the Courts with greater sentencing powers has been Government and HSE policy since the publication of the Revitalising Health and Safety Strategy Statement in June 2000.
The Health and Safety (Offences) Act 2008 was introduced as a Private Members Bill and piloted through the House of Commons by the Rt Hon Keith Hill MP and by the Rt Hon Lord Bruce Grocott in the House of Lords.
The effect of the Act is to:
a) raise the maximum fine which may be imposed in the lower courts to £20,000 for most health and safety offences;
b) make imprisonment an option for more health and safety offences in both the lower and higher courts;
c) make certain offences, which are currently triable only in the lower courts, triable in either the lower or higher courts.
The big question to be asked is how will this effect the line managers who are responsible for staff in their respective areas of control?
Under Health and Safety law, any individual in the workplace – including employees, management and directors – can be found guilty of Health and Safety offences which, under the new law, will bring with them imprisonment as an option for punishment. The maximum term of imprisonment is two years, which can also be accompanied by an unlimited fine.
So, if you are a line manager and need to ensure you are taking your responsibilities in this area seriously how best can you achieve this?
The use of information systems has been of extreme importance over the past decade for auditors and accountants to show best practice for financial matters. This has been further endorsed by legislation such as Sarbanes Oxley but health and safety still appears to take a back seat within the UK despite the change in consequence for line managers.
The use of an effective and fully audited policy and procedure management tool is an excellent way for managers at all levels within an organisation to ensure their respective teams are aware of and are suitably trained to understand and deploy health and safety procedures within the organisation.
Why should you insist that your employer goes to such lengths?
Labour MP Keith Hill, who introduced the Act, has said that imprisonment should only be appropriate in the most serious of cases. This is of little comfort given that sentencing is now a matter purely for Magistrates and Judges, who are without precedent and are yet to receive any guidance from the Sentencing Guidelines Council (which will be crucial).
Already this year we have seen the first sentences being imposed.
Watch out senior managers
Hill has said there’ll be a minimal increase in those going to jail as a result of this Act. Don’t be fooled. Given the new focus on the acts and omissions of senior managers in prosecutions brought under the new Corporate Manslaughter and Corporate Homicide Act 2007, it’s likely that the Prosecution will be tempted to send more and more senior managers away at the same time, particularly when public perception plays such an important role in high profile and multiple fatalities.
Simply put: if we cannot ‘get’ individuals for corporate manslaughter, we’ll get them for breaches of Health and Safety.
Innocent until proven guilty?
Even more worryingly, the new provisions for imprisonment pose a serious Human Rights issue. Individual defendants facing the possibility of imprisonment will be facing what’s called a ‘reverse burden of proof’.
As the law stands, the Prosecution has to prove very little – with respect to the general Health and Safety offences – before the burden of proof switches to the Defendant to show that he or she fulfilled their duty so far as was reasonably practicable.
There are a number of Policy and Procedure Management tools around that could support the manager in showing they had fulfilled their duty, one such solution is jComply from Tabaq Software.
jComply is a complete 360 process to introduce policies and procedures in the company. The system ensures that the concerned personnel reads the policy records, tests the employees knowledge about the related policy and generates comprehensive reports on the company's compliance level.
All activities are recorded so a line manager has evidence that such activities have occurred.
Certainly, if I was entering into line management today I would want to see such a supporting application introduced as a minimum to help me in this area.
Where do you sit within this area?
Let me know. Visit http://www.jcomply.com/ or email sales@tabaqsoftware.com.
The legislation was changed as it is generally recognised that the level of fines for some health and safety offences are too low. The changes will ensure that sentences can now be more easily set at a level to deter businesses that do not take their health and safety management responsibilities seriously and further encourage employers and others to comply with the law.
The Health and Safety (Offences) Act 2008, will increase penalties and provide courts with greater sentencing powers for those who flout health and safety legislation.
The Act raises the maximum penalties that can be imposed for breaching health and safety regulations in the lower courts from £5,000 to £20,000 and the range of offences for which an individual can be imprisoned has also been broadened.
The Act, which covers Great Britain and Northern Ireland, came into force in January 2009.
The main points of the Act are;
Increasing penalties and providing the Courts with greater sentencing powers has been Government and HSE policy since the publication of the Revitalising Health and Safety Strategy Statement in June 2000.
The Health and Safety (Offences) Act 2008 was introduced as a Private Members Bill and piloted through the House of Commons by the Rt Hon Keith Hill MP and by the Rt Hon Lord Bruce Grocott in the House of Lords.
The effect of the Act is to:
a) raise the maximum fine which may be imposed in the lower courts to £20,000 for most health and safety offences;
b) make imprisonment an option for more health and safety offences in both the lower and higher courts;
c) make certain offences, which are currently triable only in the lower courts, triable in either the lower or higher courts.
The big question to be asked is how will this effect the line managers who are responsible for staff in their respective areas of control?
Under Health and Safety law, any individual in the workplace – including employees, management and directors – can be found guilty of Health and Safety offences which, under the new law, will bring with them imprisonment as an option for punishment. The maximum term of imprisonment is two years, which can also be accompanied by an unlimited fine.
So, if you are a line manager and need to ensure you are taking your responsibilities in this area seriously how best can you achieve this?
The use of information systems has been of extreme importance over the past decade for auditors and accountants to show best practice for financial matters. This has been further endorsed by legislation such as Sarbanes Oxley but health and safety still appears to take a back seat within the UK despite the change in consequence for line managers.
The use of an effective and fully audited policy and procedure management tool is an excellent way for managers at all levels within an organisation to ensure their respective teams are aware of and are suitably trained to understand and deploy health and safety procedures within the organisation.
Why should you insist that your employer goes to such lengths?
Labour MP Keith Hill, who introduced the Act, has said that imprisonment should only be appropriate in the most serious of cases. This is of little comfort given that sentencing is now a matter purely for Magistrates and Judges, who are without precedent and are yet to receive any guidance from the Sentencing Guidelines Council (which will be crucial).
Already this year we have seen the first sentences being imposed.
Watch out senior managers
Hill has said there’ll be a minimal increase in those going to jail as a result of this Act. Don’t be fooled. Given the new focus on the acts and omissions of senior managers in prosecutions brought under the new Corporate Manslaughter and Corporate Homicide Act 2007, it’s likely that the Prosecution will be tempted to send more and more senior managers away at the same time, particularly when public perception plays such an important role in high profile and multiple fatalities.
Simply put: if we cannot ‘get’ individuals for corporate manslaughter, we’ll get them for breaches of Health and Safety.
Innocent until proven guilty?
Even more worryingly, the new provisions for imprisonment pose a serious Human Rights issue. Individual defendants facing the possibility of imprisonment will be facing what’s called a ‘reverse burden of proof’.
As the law stands, the Prosecution has to prove very little – with respect to the general Health and Safety offences – before the burden of proof switches to the Defendant to show that he or she fulfilled their duty so far as was reasonably practicable.
There are a number of Policy and Procedure Management tools around that could support the manager in showing they had fulfilled their duty, one such solution is jComply from Tabaq Software.
jComply is a complete 360 process to introduce policies and procedures in the company. The system ensures that the concerned personnel reads the policy records, tests the employees knowledge about the related policy and generates comprehensive reports on the company's compliance level.
All activities are recorded so a line manager has evidence that such activities have occurred.
Certainly, if I was entering into line management today I would want to see such a supporting application introduced as a minimum to help me in this area.
Where do you sit within this area?
Let me know. Visit http://www.jcomply.com/ or email sales@tabaqsoftware.com.
Saturday, 17 January 2009
Tabaq Software Expands with Anderson Appointment
Tabaq Software specialises in provding compliance solutions to the heavily regulated industries. To support the expansion in UK, Tabaq Software has appointed Tim Anderson as Sales Manager. To read more about our innovative compliance product, visit www.tabaqsoftware.com/jcomply/
read more | digg story
read more | digg story
Saturday, 27 September 2008
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.
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.
Tuesday, 16 September 2008
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.
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.
FSA's Regulatory Timeline
I have endeavored to put together a regulatory timeline for FSA. I thought this will be useful for those who want to know when FSA was formed and the important milestones and events that have occured since its inception in 1997.
Please do let me know if I have missed an important date...
FSA’s Regulatory Timeline
· October 1997 - In 1997 Securities and Investment Board along with its self-regulatory organisations were consolidated under one roof and re-named as the Financial Services Authority.
· June 1998 (N1) - Major change occurred in 1998 when the responsibility for banking supervision was transferred from the Bank of England to the FSA. This date is generally known as N1.
· 1 December 2001 (N2) - FSA received statutory and regulatory powers under the Financial Services and Markets Act 2000 (FSMA) on 1st of December 2001. This date is known as N2.
· 26 October 2001 - The Patriot Act signed by President George W Bush as a result of event of 11 September 2001. Covering 900 pages of legislation, the Act provides legislation on international money laundering and terrorist financing for financial institutions based in United States and abroad.
· October 2001 - In response to 11 September 2001 events in US, FATF expanded the international anti money laundering standards to include Eight Special Recommendations on Terrorist Financing
· October 2004 - FATF expanded its comprehensive framework for anti-money laundering and terrorist financing, making its overall standards to 40 plus 9 recommendations
· 2004 - Basel II, the Capital Requirements Directive is introduced by Basel Committee to promote the adoption of stronger risk management practices by the banking industry especially covering operational and credit risk.
· 31 December 2004 – The Transparency Directive was published on 31 December 2004 which updates parts of the existing EU Consolidated Admissions and Reporting Directive (CARD). The Transparency Directive sets minimum requirements for financial reporting and disclosure of major shareholdings for issuers hence enhancing transparency in EU capital markets.
· January 2005 – Insurance Mediation Directive is implemented by FSA by accepting the general insurance business under its wing.
· 18 June 2004 – FSA implements the EU Market Abuse Directive which is a framework of regulations on insider dealings, market manipulation in the EU and proper disclosure of information to the market.
· 2007 – FSA’s approach to regulation has shifted to principles-based and outcomes focused. The plan is to be more principles-based by 2008 than rules based.
· 2007 - Treating customers fairly (TCF) is an initiative launched by FSA as part of its drive on principles-based regulation for the financial firms in the retail sector. TCF provides six outcomes to the firms to gauge their progress on how to treat their customers. TCF marks a shift from rules specific regulation to principles-based regulation.
· July 2007 – EU published its draft proposal for Solvency 2 framework which replaces the existing Solvency 1 requirements. Solvency 2 defines EU wide capital requirements and risk management standards for the EU insurance industry.
· July 2007 - As a result of the Northern Rock crisis, some of the important recommendation made by the FSA Internal Audit Report included FSA senior management to have increased engagement with high impact firms; FSA to increase the rigor of its day to day supervision and FSA to increase its focus on prudential supervision, including liquidity and stress testing.
· September 2007 - FSA published its framework for recognizing industry guidance. While industry guidance or best practices are not made mandatory by FSA, if a breach of FSA principles is established, non-compliance to industry guidance can lead to an enforcement case.
· 1 November 2007 - Markets in Financial Instruments Directive (MiFID) was introduced which replaces the Investment Services Directive (ISD). MiFID extends the scope of ISD for financial institutions by including requirements covering conduct of business and internal organisation.
· 15 December 2007 - 3rd EU Money Laundering Directive replaces previous two directives and covers due diligence and PEP
Please do let me know if I have missed an important date...
FSA’s Regulatory Timeline
· October 1997 - In 1997 Securities and Investment Board along with its self-regulatory organisations were consolidated under one roof and re-named as the Financial Services Authority.
· June 1998 (N1) - Major change occurred in 1998 when the responsibility for banking supervision was transferred from the Bank of England to the FSA. This date is generally known as N1.
· 1 December 2001 (N2) - FSA received statutory and regulatory powers under the Financial Services and Markets Act 2000 (FSMA) on 1st of December 2001. This date is known as N2.
· 26 October 2001 - The Patriot Act signed by President George W Bush as a result of event of 11 September 2001. Covering 900 pages of legislation, the Act provides legislation on international money laundering and terrorist financing for financial institutions based in United States and abroad.
· October 2001 - In response to 11 September 2001 events in US, FATF expanded the international anti money laundering standards to include Eight Special Recommendations on Terrorist Financing
· October 2004 - FATF expanded its comprehensive framework for anti-money laundering and terrorist financing, making its overall standards to 40 plus 9 recommendations
· 2004 - Basel II, the Capital Requirements Directive is introduced by Basel Committee to promote the adoption of stronger risk management practices by the banking industry especially covering operational and credit risk.
· 31 December 2004 – The Transparency Directive was published on 31 December 2004 which updates parts of the existing EU Consolidated Admissions and Reporting Directive (CARD). The Transparency Directive sets minimum requirements for financial reporting and disclosure of major shareholdings for issuers hence enhancing transparency in EU capital markets.
· January 2005 – Insurance Mediation Directive is implemented by FSA by accepting the general insurance business under its wing.
· 18 June 2004 – FSA implements the EU Market Abuse Directive which is a framework of regulations on insider dealings, market manipulation in the EU and proper disclosure of information to the market.
· 2007 – FSA’s approach to regulation has shifted to principles-based and outcomes focused. The plan is to be more principles-based by 2008 than rules based.
· 2007 - Treating customers fairly (TCF) is an initiative launched by FSA as part of its drive on principles-based regulation for the financial firms in the retail sector. TCF provides six outcomes to the firms to gauge their progress on how to treat their customers. TCF marks a shift from rules specific regulation to principles-based regulation.
· July 2007 – EU published its draft proposal for Solvency 2 framework which replaces the existing Solvency 1 requirements. Solvency 2 defines EU wide capital requirements and risk management standards for the EU insurance industry.
· July 2007 - As a result of the Northern Rock crisis, some of the important recommendation made by the FSA Internal Audit Report included FSA senior management to have increased engagement with high impact firms; FSA to increase the rigor of its day to day supervision and FSA to increase its focus on prudential supervision, including liquidity and stress testing.
· September 2007 - FSA published its framework for recognizing industry guidance. While industry guidance or best practices are not made mandatory by FSA, if a breach of FSA principles is established, non-compliance to industry guidance can lead to an enforcement case.
· 1 November 2007 - Markets in Financial Instruments Directive (MiFID) was introduced which replaces the Investment Services Directive (ISD). MiFID extends the scope of ISD for financial institutions by including requirements covering conduct of business and internal organisation.
· 15 December 2007 - 3rd EU Money Laundering Directive replaces previous two directives and covers due diligence and PEP
Thursday, 17 January 2008
Clamp down by FSA
The Financial Services Authority (FSA) is setting an example by clamping down on financial institutions found in breach of their regulatory requirements. FSA has started the year by issuing huge fines to two financial institutions; £1.085 million to HFC Bank (part of HSBC Group) for PPI failings and £250,000 to Square Mile Securities Limited (a stock brokerage company) for high pressure sales tactics.
The big question is, is FSA setting the tone for 2008? Are we going to see more fines issued for negligence or lack of having customer due diligence policies in place?
What puzzles me is that the average John is so naive enough to buy into the pressure sales tactics used by companies like Square Mile. We are not really talking about a door to door sales man trying to con innocent housewives. Surely, the customer also needs to take some responsibility, step back, educate oneself and then take a calculated risk. As they say, ignorance of law is no excuse. I feel, while FSA is clamping down on financial institutions to comply with its regulations, efforts ought to be made to educate the customer on making sound financial decisions based on calculated risk.
Note:
PPI covers repayments on loans, mortgages and credit cards if the borrower is unable to make them because of loss of earnings as a result of accident, sickness, unemployment or death.
News Links:
http://www.fsa.gov.uk/Pages/Library/Communication/PR/index.shtml
http://news.bbc.co.uk/1/hi/business/7191506.stm
The big question is, is FSA setting the tone for 2008? Are we going to see more fines issued for negligence or lack of having customer due diligence policies in place?
What puzzles me is that the average John is so naive enough to buy into the pressure sales tactics used by companies like Square Mile. We are not really talking about a door to door sales man trying to con innocent housewives. Surely, the customer also needs to take some responsibility, step back, educate oneself and then take a calculated risk. As they say, ignorance of law is no excuse. I feel, while FSA is clamping down on financial institutions to comply with its regulations, efforts ought to be made to educate the customer on making sound financial decisions based on calculated risk.
Note:
PPI covers repayments on loans, mortgages and credit cards if the borrower is unable to make them because of loss of earnings as a result of accident, sickness, unemployment or death.
News Links:
http://www.fsa.gov.uk/Pages/Library/Communication/PR/index.shtml
http://news.bbc.co.uk/1/hi/business/7191506.stm
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