Surveillance and the New Way of Working

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Julia Hoggett, Director of Market Oversight at the FCA spoke at the City Financial Global event yesterday, which included some very interesting views on surveillance and the new way of working.

 

Surveillance Highlights -

  • "While scenarios emerged early in the pandemic where the usual levels of recording and surveillance were not possible, our experience suggests firms have now overcome these challenges. Our expectation is that going forward, office and working from home arrangements should be equivalent - this is not a market for information that we wish to see be arbitraged."

 

  • "We expect firms to have updated their policies, refreshed their training and put in place rigorous oversight reflecting the new environment - particularly regarding the risk of use of privately owned devices. These policies should be demonstrable to us and to your audit teams. It should go without saying that policies should prevent the use of privately owned devices for relevant activities where recording is not possible. New communication mechanisms, before they are used, should have controls in place where required and their use be approved by firm management. The regulatory obligations have not changed, the how may be changing, but the what remains the same."

 

  • "Another concern arising from remote working is the oversight and provision of advice from Compliance Advisory teams. Where firms are operating back in the office, it is important to consider whether the compliance support to those desks is appropriately structured and staff have access to the relevant materials and support."

 

  • "There is also a risk of less self-policing amongst front office staff. As an example, consider a pre-crisis situation where a front office employee observes, or overhears, something questionable involving a colleague nearby. In normal - pre-crisis - circumstances, we would hope, and expect, that the activity would be questioned, or reported to Compliance. With people working remotely, especially when staff are working from home, that type of first line control may be diminished, or absent."

 

  • "An important factor here is the role that good culture plays within firms. Compliance teams - indeed management and leaders throughout firms - should consider how they can reiterate, and reinforce their expectations. Staff should be in no doubt about the standards expected of them. And they should be in no doubt that these standards apply whether they are in the regular office, a disaster recovery site or at a makeshift workstation at home. Culture matters, and it matters most when the risks are highest."

 

  • "Having a culture that minimises the risk of poor conduct taking place in the first place remains critical. It is important that staff are conscious of the role they play as the first line of defence."

 

The speech is available to view at https://www.fca.org.uk/news/speeches/market-abuse-coronavirus

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