Caleb Hawkins, head of our compliance and legal desks, speaks to Philippe Reverre, ex Director of Assurance and Training at Barclays and Head of Compliance for HSBC France global banking and markets.
Throughout this ‘Compliance During Covid-19’ series, Caleb interviews a number of compliance professionals and experts around the market to get their insight around the market during Covid-19.
In episode 6 Caleb speaks with Philippe Reverre, ex Director of Assurance and Training at Barclays and Head of Compliance for HSBC France global banking and markets.
Significant increase of the volatilities in certain markets (equity being a good example). Drastic increase in the volumes traded over the last months and potentially in a near future.
Short term speculative risk.
Emphasis on the importance of first line supervision (and second line to a certain extent) to detect non compliant behaviors and mitigate conduct risk as effectively and quickly as possible.
Importance of controls and the reactivity of the surveillance / assurance functions. In the assurance space, will it mean shorter and more assertive assignments and a shorter cycle (between planning and execution), probably? Can we wait 2 to 4 months for the conclusions of an audit or a review in the current environment, I am not sure.
Obvious increase in the materiality of a number of risks including operational risk and IT.
Weaknesses in the infrastructures (IT, production, wfh, hot lines…) are becoming immediately visible.
Recruitment takes longer than before or has even been temporarily paused for a few months.
Remote interviews (over the phone or through video) can change the type of interactions between the interviewer and the interviewee (colder?) and sometimes the type of questions especially over the phone (no access to body language). Risk of interviews more technical and less human. Difficult to gauge the seniority and readiness of the interviewee?
Some regulations might be paused or delayed. It does not mean that they will not be implemented and embedded, but the regulators (FCA, BAFIN, AMF…) are currently planning to stick to a stringent risk based approach and will reevaluate and revisit their roadmap in light of the COVID 19 impacts.
You might also see new regulations popping up, rather sooner than later. In the surveillance space, voice is being recorded and monitored, but what about video? This is a brand new media that is not monitored or watched, but video could be used dishonestly (risks of market abuse, anti competition…).
Investigations and on site audits from regulators have also been paused. It creates a certain level of uncertainty at the institutions. When will everything be resumed? How long will it take then?
The need for qualified resources and recruitments will not slow down.
In the perm space:
In the temp space:
It is not as if the front office activity had stopped. It means that all the support functions, including Compliance have to keep the pace and work in a BAU mode.
I think that more perceived freedom for everyone (the wfh protocols and resulting autonomy) means more risks, therefore more controls should be defined.
The formula could be « FREEDOM = (AUTONOMY + RISK) x CONTROLS », isn’t?!
If you wish to give your thoughts or opinions on the market over these uncertain and unprecedented times, then please reach out to Caleb Hawkins at firstname.lastname@example.org.