$10b+ reasons
The regulators lay out their banking cards
Welcome to This Week in GRC, MBK Search's weekly digest of the news and views in the world of regulation and compliance.
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Live Webinar: Is Private Investment Ready for the Regulators?
Tuesday 17 October, 12:00 EDT
The SEC's decision in August to enhance the regulation of private fund advisers sent shockwaves through the industry. A market long used to minding its own business is now having to contend with unprecedented oversight.
Everyone from hedge funds to private equity investors is asking the same question: What does this mean for us, and what comes next?
In this edition of MBK Talks, we'll explore the ruling and the steps companies need to take to stay compliant. Sign up here.
The Opening Bell: The FDIC's $10b+ reasons
The Federal Deposit Insurance Corporation (FDIC) on Thursday proposed strict new guidelines to strengthen risk management and board oversight for banks with more than $10 billion in assets.
If finalized, the binding rules would establish expectations for bank boards on structure, duties, and risk oversight. Boards would need a majority of independent directors and key committees on risk, audit and compensation. Plus, directors would have to actively challenge management and set a tone discouraging imprudent practices.
MBK Search’s research team has broken down the ten biggest requirements listed in the proposed guidelines. Make sure you read and share the breakdown with your team here.
Headlines:
Companies acquiring other businesses can face more lenient treatment if they report potential criminal misconduct uncovered during the merger and acquisition process to prosecutors, the Department of Justice announced on Wednesday. (Wall Street Journal)
A broker affiliate of Archer Daniels Midland was ordered to pay nearly £6.5 million (U.S. $7.9 million) by the U.K. Financial Conduct Authority for not addressing AML systems and controls deficiencies first alleged by the regulator in almost a decade ago. (Compliance Week)
The U.S. Supreme Court on Tuesday seemed likely to preserve the work of the Consumer Financial Protection Bureau, with some justices voicing skepticism the agency violated the Constitution in the way it is funded. (AP)
The Society of Corporate Compliance & Ethics held its 2023 conference in Chicago this week, with more than 1,000 compliance professionals gathering from all corners to talk shop.
Radical Compliance has produced this excellent run-through from the conference.
Headlines:
The Public Company Accounting Oversight Board (PCAOB) on Thursday approved a tightening of requirements around how audit firms obtain and verify outside evidence on their clients, the first major upgrade to such rules in decades. (WSJ)
The PCAOB is likely to report flaws in 40% of the 2022 audits they review, its Chair Erica Williams said Thursday, noting that many auditors fail to back up their opinions with solid evidence. (CFO Dive)
The Internal Audit labor market continues to be tight. MBK Search CEO Spencer Knibbe has this breakdown of the current state of play:
"I recently attended a large internal audit conference in Europe where attendees were anxious (as always) to discuss their daily dilemmas and seek my perspectives. Not surprisingly, one of the first conversations I had involved internal audit’s lack of popularity in one of the attendee’s companies. She lamented that internal auditors are not very welcome – regardless of the audit they undertake. To paraphrase her words, 'they cringe whenever they hear we are coming!'"
Why do internal auditors instil such cringe in their companies? The always sharp Richard Chambers explores the reasons in his latest dispatch.
Headlines:
What can risk managers learn from Liverpool FC? Controversy surrounding a disallowed goal in a Premier League Football game has sparked heated discussion across the pond. But is there something in there for risk professionals?
In his opening statement on Wednesday, defense lawyer Mark Cohen portrayed Sam Bankman-Fried as a “math nerd” who overlooked risk management in building FTX, but did not steal customer money. (Reuters)
"Ultimately, most jargon is more about the speaker establishing status rather than communicating transparently," writes Patrick Healy. "It’s familiar to us but can seem alien to non-risk people, at least outside of financial services. It sounds a bit wonky, a bit abstract, a bit far from the nuts and bolts of running a business."
In an industry that strives for transparency, is there room for jargon? A post well worth pondering.
To what extent is there is a knowledge gap around how ILS integrates with existing corporate risk programs? This intriguing panel discussion from Artemis ILS Asia 2023 conference seeks to explore that.
The latest GRC jobs from the United States, Europe, and APAC can be found on MBK Search’s website. Visit www.mbksearch.com/jobs for more.