Andrew Swan
Andrew Swan

Member Article

FSA requires HSBC Group to take action

The FSA has confirmed that they are taking action in respect of HSBC’s compliance with anti-money laundering rules and the US sanction requirements. Whilst this action is separate to that taken in the US, the FSA has been working closely with the US relevant authorities.

The FSA is hoping to avoid similar failings occurring again by ensuring compliance with all relevant legal and regulatory requirements. In particular, the FSA has confirmed that they require HSBC Holdings to:

1. Establish a committee of the HSBC Board with a mandate to oversee matters relating to anti-money laundering, sanctions, terrorist financing and proliferation financing;

2. Review relevant Group policies and procedures to ensure that all parts of the HSBC Group are subject to standards equivalent to those required under UK requirements;

3. Appoint a Group Money Laundering Reporting Officer (MLRO) who will be an FSA approved person, with responsibility for ensuring that systems and controls are in place across the Group, to ensure the Group is in compliance with all relevant legal and regulatory requirements; and

4. Employ an independent monitor to oversee the Group’s compliance with UK anti-money laundering, sanctions, terrorist financing and proliferation financing requirements and to provide independent reporting to the HSBC Board committee and regulators.

The FSA points out that these measures are in addition to the requirements of the Cease and Desist order issued by the Federal Reserve Board and the Deferred Prosecution Agreement issued by the US Department of Justice on 11 December 2012.

Andrew Swan, Head of the Financial Crime Unit at Newcastle-based solicitors Short Richardson & Forth LLP commented: “The FSA has the task of regulating the financial services industry here in the UK, which includes maintaining market confidence, ensuring protection for consumers and fighting financial crime. It has clearly taken the view that there are significant issues for the HSBC Group to address and no doubt will be working closely with the banking group to ensure compliance.”

This was posted in Bdaily's Members' News section by Andrew Swan .

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