On February 2 & 3 - Risk Based Internal Auditing (RBIA): 2-day Comprehensive Training Workshop
On February 5 & 6 - Operations Risk Management and Mitigation - from Assessment to Implementation: 2-day In-person Seminar
Showing posts with label operations risk. Show all posts
Showing posts with label operations risk. Show all posts
Thursday 15 January 2015
If you are based in or around Los Angeles, then this training is for you
On February 2 & 3 - Risk Based Internal Auditing (RBIA): 2-day Comprehensive Training Workshop
On February 5 & 6 - Operations Risk Management and Mitigation - from Assessment to Implementation: 2-day In-person Seminar
Monday 12 May 2014
Worst Abuses of High Frequency Traders a Thing of The Past, Says Whistleblower
From Wealth Management.com
“ 'I don’t think that sort of stuff is going on anymore', said Richard Gates, co-founder of TFS Capital.
The Westchester, Pennsylvania trader who first went public with proof he was being ripped off by high-frequency traders, and whose story would play a minor role in Michael Lewis’ recent bestseller Flash Boys, now says retail investors and advisors have nothing to fear from so-called “latency arbitrage” strategies.
“I don’t think that sort of stuff is going on anymore, “ said Richard Gates, co-founder of TFS Capital, to a group of financial advisors gathered at the Investment Management Consultants Association’s annual conference Tuesday. “I think the markets are stronger than ever. A lot of these issues have been resolved.”
Gates explained to the gathering how, in 2008 and 2009, he discovered his stock transactions were not getting the best price available in the market, information ostensibly guaranteed by the numerous exchanges, like NASDAQ and the NYSE, who bring information on buy and sell orders together in a National Best Bid Offer data feed in order to settle on the fairest price to both sides of the transaction.”
read more>>
Saturday 10 May 2014
Board and C-Level recognition of operational risk management rising within financial institutions
“According to a new survey report released by KPMG and The Risk Management Association, large financial institutions are continuing to make important strides in increasing recognition of operational risk among the board and C-level executives. However, there are opportunities for improving operational risk management’s alignment with business strategy and more effectively deploying operational risk stature and appetite across all levels of the enterprise, according to the survey.”
read more>>
Monday 20 January 2014
Upgrade your bank operations skills
And what better way to move into the new year than by making sure that your staff get the critical training that they need to ensure that 2014 is the success that we all hope it will be.
CITADEL ADVANTAGE is offering three critical courses in Johannesburg in May 2014 that neither you or your staff can afford to miss.
A 2-day intensive course on the Fundamentals of the Management & Mitigation of Operational Risk in banks based on the requirements of the Basel Accords A 1-day program on the Foreign Account Tax Compliance Act (FATCA) designed specifically for foreign financial institutions (that is those outside of the US), aimed at providing participants with a sound basis of knowledge of FATCA, what it is and how it should be implemented. An intensive 2-day primer for payments professionals on International Payments. This course has been tailored for payment professionals, either in commerce or banking who need to gain a closer understanding of International Payments.
Monday 14 January 2013
What we are reading … 14th January 2013
Online Content A New Challenge for Mobile Operators http://dld.bz/bYnYW
Global Regulators Give In To Banks Over Risk Rule http://twb.io/U0V9vg
Africa eyes M-Pesa model as mobile phone use goes up http://shar.es/4GaDw
The Death Of Cash Is At Least 190 Years Away http://www.finextra.com/Community/FullBlog.aspx?blogid=7254
How did a mega bank nail a mobile app better than most tech companies? http://dld.bz/bYnYG
Five Key Banking Bets http://shar.es/4G1iQ
Tuesday 29 November 2011
Now is the time to intensify your staff training
The current climate has made it a busy and volatile time for both risk managers and operations professionals. These conditions have also made it the ideal time to intensify staff training in order to remain competitive. Well-trained employees are knowledgeable and more motivated and will find new ways of generating revenue or protecting the banks operations in the tough times we now find ourselves in.
We list below Operations & Payments Training that is coming up over the next few months. Just click on the course name for full details.
INTERNATIONAL PAYMENTS – Johannesburg – 6/7 February
REMITTANCES - ISSUES & OPPORTUNITIES – Johannesburg – 8/9 February
BUSINESS CONTINUITY & SCENARIO PLANNING – Singapore – 14/15 February
OPERATIONS RISK MANAGEMENT FOR NON-RISK MANAGERS – Singapore – 16/17 February
Tuesday 1 November 2011
TRAINING COURSE – “OPERATIONS RISK MANAGEMENT FOR NON RISK MANAGERS”
Singapore – 16 & 17 February 2012
This course is a basic introduction to Operations Risk management and mitigation developed specifically for Non Risk Managers and other business and line staff. It is intended to provide participants with a clear understanding of operations risk management and mitigation within the organization.
Often “risk management” is seen as the domain of the professional risk manager. This assumption is totally wrong. Every manager, every staff member; whether they fill a line or staff function needs to be acutely aware of the risks in the business and the operations that they perform.
Operations Risk is everywhere and understanding what it is and how it can be managed is vital component of every business’s strategy.
This course will provide participants with the answers to the most common questions posed when it comes to risk management like;
This course is a basic introduction to Operations Risk management and mitigation developed specifically for Non Risk Managers and other business and line staff. It is intended to provide participants with a clear understanding of operations risk management and mitigation within the organization.
Often “risk management” is seen as the domain of the professional risk manager. This assumption is totally wrong. Every manager, every staff member; whether they fill a line or staff function needs to be acutely aware of the risks in the business and the operations that they perform.
Operations Risk is everywhere and understanding what it is and how it can be managed is vital component of every business’s strategy.
This course will provide participants with the answers to the most common questions posed when it comes to risk management like;
- What is operations risk?
- How is it managed?
- How do you apply and implement risk mitigation activities within an organisation?
- Anticipating factors, interpreting numbers and being aware of the potentials threats that might come up in day to day business.
- All management and personnel involved in business, line and staff functions
- Risk Managers
- Financial Officers
- Internal Auditors
- Staff with roles and responsibilities in operational risk in risk management departments, businesses and central departments
Wednesday 23 February 2011
The Reasons for the Different Types of Risks Faced by Banks
Read what one of our Principal Associates has written in a new article published in Ezene Articles – CLICK HERE.
Wednesday 16 February 2011
Two pension switching firms fined by the Financial Services Authority
Perspective Financial Management (PFM), based in Milton Keynes, was fined £49,000, while Cricket Hill Financial Planning Ltd (Cricket Hill), in Barnsley, was fined £70,000, along with the firm’s director Jeremy Sheard who will pay £24,500. His colleague Mark Kelsey, responsible for compliance, was issued with a public censure.
Cricket Hill
Cricket Hill had significant problems with its advice and sales processes. Its advisers were routinely recommending customers switch their pensions to a pension fund risk management service, without sufficiently researching alternative products. The firm could not demonstrate the suitability of this advice, particularly as most of its customers were unsophisticated financially and had small pension pots.
Cricket Hill and Sheard also failed to identify and manage conflicts of interest adequately. Sheard, for example, owned shares in the risk management service which his firm was advising most customers to use and this was not disclosed. However, no payments, or dividends to shareholders, were made by the risk management service firm to Cricket Hill or its directors and employees.
PFM
An investigation by the FSA found shortcomings in the way that PFM monitored its pension switching advice, resulting in customers’ receiving unsuitable advice. PFM failed to collect or record important information such as details of customers’ existing pension plan, needs and objectives.
The FSA found evidence of unsuitable pension advice in five out of the nine cases reviewed. PFM made unsuitable recommendations to customers to switch pensions when the new pension was almost identical to their existing scheme, meaning customers incurred unnecessary costs. The investigation also revealed that customers could not make informed decisions about whether to switch pensions as PFM provided inadequate information on the cost of services associated with the new pension such as discretionary fund management.
The FSA also found that PFM failed to put in place any system or procedure to ensure it only recommended Unregulated Collective Investment Schemes (UCIS) to customers who met specific, statutory, exemptions such as customers who were high net worth or sophisticated investors.
Margaret Cole, managing director of the FSA’s enforcement and financial crime division:
“Pension switching is a complex area, and any adviser recommending a change of provider must be able to demonstrate that this advice is suitable.
“Firms that fail to do this put customers at risk of being worse off due to exit penalties applied to their existing pension and higher charges on the new pension.
“The FSA considers the failings at PFM and Cricket Hill to be serious, and will not hesitate to take action where we find evidence of bad practice relating to pension advice.”
Both firms cooperated with the FSA’s investigations. In addition to the fines, the FSA has appointed a skilled person to carry out past business reviews of relevant pension switching cases at both firms.
Friday 28 January 2011
Reducing Risk in Over-the-Counter Derivatives
"As market participants begin operating in a more regulated environment, supervisors of major market participants must continue to work cooperatively and proactively to drive structural improvements, monitor emerging risks, and support consistent supervisory approaches across jurisdictions. The ODSG will continue to play a key role in meeting these objectives," said William C. Dudley, president and chief executive officer of the Federal Reserve Bank of New York.
Market participants provided supervisors with updates on recent work and agreed to commit to further improvements in support of G-20 objectives for reducing risks in global OTC derivatives markets. Participants agreed to communicate next steps and commitments in a collective letter to the ODSG by March 31, 2011, in accordance with the recommendations of the Financial Stability Board (FSB) in its October 2010 report entitled "Implementing OTC Derivatives Market Reforms."
Industry commitments to the ODSG will continue to focus on increasing standardization and transparency, as well as the further development and innovation of central clearing facilities to reduce counterparty credit risk among a broader set of participants in the OTC derivatives markets. "We must continue to advocate for solutions that will extend central clearing benefits to a broader set of participants in a safe and sound manner," said Mr. Dudley.
Monday 24 January 2011
Cosmetic firm attacked by hackers
The hacker compromised clients who placed online orders with the firm from October last year until just a few days ago. Customers who may have been exposed have been requested to contact their banks for advice. These clients were contacted by e-mail on 20 January.
A full external Forensic Investigation of the security breach has been started.
The firm has announced that a completely separate, temporary website will be launched in a few days - initially taking PayPal payments only.
Lush Cosmetics also posted a message to the hacker stating “If you are reading this, our web team would like to say that your talents are formidable. We would like to offer you a job - were it not for the fact that your morals are clearly not compatible with ours or our customers”.
Firm fined £490,000 for failing to provide accurate transaction reports
Firms are required to ensure they submit data for reportable transactions by close of business the day after a trade is executed. The FSA uses this data to detect and investigate suspected market abuse including insider trading and market manipulation.
Between November 2007 and September 2009, City Index failed to submit accurate transaction reports in respect of approximately 2 million transactions, representing nearly 60% of its reportable transactions. It failed to report approximately 55,000 transactions and reported approximately 1,970,000 transactions with one or more data fields completed improperly.
City Index was also found to be in breach of FSA Principles as the firm failed to put in place a mechanism for ensuring the accuracy and validity of its transaction reports, and failed to identify fundamental errors in its transaction reporting process upon the implementation of a new trading platform.
These breaches occurred despite the FSA sending repeated reminders to firms of their obligations to provide accurate data and of the importance of compliance with the FSA rules on transaction reporting.
Margaret Cole, managing director of enforcement and financial crime, said:
"City Index failed to report accurately a high proportion of its transactions for almost two years. This failure is a serious breach of our rules because it can have a damaging impact on our ability to detect and investigate suspected market abuse.
"Firms and their management must ensure they submit quality transaction reporting data and we encourage all firms to review the integrity of this data on a regular basis. We will continue to monitor the quality of firm reporting and we are committed to taking action where necessary to ensure firms comply with their reporting obligations."
The firm has taken a number of steps to address the concerns raised including commissioning a formal review of its transaction reporting processes by external consultants and implementing a comprehensive remediation project.
Thursday 13 January 2011
Former analyst fined £50,000 for disclosing misleading information
Gower, a former senior research analyst employed by MF Global Securities Limited and MF Global UK Limited, attended a meeting with the Chief Executive Officer of Punch Taverns plc on 7 May 2008. In the course of the meeting they discussed an application made by Enterprise Inns plc to Her Majesty’s Revenue and Customs (HMRC) for approval to convert to a Real Estate Investment Trust (REIT). This discussion concerned solely information which was in the public domain.
Following the meeting, Gower sent a Bloomberg instant message to 14 clients of MF Global, a Bloomberg reporter and MF Global equity salesmen in the following terms:
“*** HOT OFF PRESS*** Just had meeting with CEO of PUNCH TAVERNS. They have heard from HM Revenue & Customs that it is highly likely Enterprise Inns has been granted REIT status and ETI are due to announce this on 13th May at interims. Expect ETI to bounce (was up 10% on previous HMRC news) BUT then fall back as mkt realises it will take time to implement.... MORE on my meeting to follow.... Chris”
This instant message did not accurately reflect the conversation Gower had had. It gave the impression of containing inside information although, in fact, Gower had no such information. The message was misleading and inaccurate. It was rapidly circulated widely in the market and contributed to a substantial increase in the volume of ETI shares traded.
Gower gave no apparent consideration to the consequences to the market of his message. His conduct was careless and fell below proper standards of conduct in the circumstances.
Margaret Cole, the FSA’s managing director of enforcement and financial crime, said:
“There is no excuse for a senior retail analyst to be so careless with messages that could have such an impact on the market. Gower's dissemination of inaccurate information contributed to a large increase in the volume of shares traded and a disorderly market in ETI shares.
“Maintaining market confidence is one of our key objectives and we hope that the fine imposed in this case will act as a reminder to approved persons of their obligations to ensure markets are not provided with careless misinformation.”
The FSA accepts that Gower did not intend to give the impression that this was inside information but concludes that Gower failed to observe proper standards of market conduct in this matter and has imposed a fine of £50,000.
Investment banker, his wife and family friend plead guilty to insider dealing
The offences relate to trading in a number of different London Stock Exchange and AIM listed shares between 2000 and 2008 and were only brought to an end when the City of London Police working with FSA staff arrested the Littlewoods in March 2009.
The third defendant Helmy Omar Sa'aid was returned to the UK in March 2010 following the execution of a European Arrest Warrant in Mayotte, one of the Comoros Islands.
The case was bought by the FSA and heard at Southwark Crown Court. It is the sixth successful prosecution for insider dealing bought by the FSA and is part of its ongoing drive to tackle market abuse and promote efficient, orderly and fair markets.
Margaret Cole, managing director of enforcement and financial crime, said:
“It seems that the penny is beginning to drop. These guilty pleas show that our strategy of a tough approach to insider dealing - and, in particular, demonstrating that we are prepared to fight difficult criminal prosecutions to trial - is paying off. Dedicated hard work, bold and innovative use of the tools at our disposal and close seamless co-operation between our markets, enforcement and intelligence functions underpin our successful track record in this complex area.”
The full sentencing and confiscation hearing will take place in the week commencing 31 January.
Wednesday 12 January 2011
Former Chase Bank official convicted of taking bribes and disclosing existence of a Suspicious Activity Report
Frank E. Mendoza, 45, has been convicted on three counts of bank bribery and one count of unlawfully disclosing a SAR. The federal jury deliberated about 30 minutes before issuing its verdict, which included a not guilty finding on a charge of attempted economic extortion.
Following a one-week trial in United States District Court, the jury determined that Mendoza demanded a $25,000 bribe, ultimately accepted $10,000 in bribes from the customer, and disclosed the existence of a SAR. The Financial Crimes Enforcement Network (FinCEN), a bureau within the Treasury Department that receives SARs from financial institutions around the country, believes Mendoza is the first bank official in the nation to be convicted of criminal charges for revealing the filing of a SAR.
The evidence presented during the trial showed that Mendoza, who worked as a loss mitigation specialist for Chase Bank, conducted an investigation of a delinquent borrower on mortgage loans made in relation to seven properties in Palmdale. In the fall of 2008, Mendoza reported to Chase that he suspected fraud in relation to the mortgages, and the bank in late November 2008 filed a SAR with FinCEN.
Several months later, Mendoza approached the borrower and suggested that he pay $25,000 in exchange for Mendoza’s assistance with Chase and a possible federal criminal investigation related to the loans. In these conversations, Mendoza disclosed the filing of the SAR and asserted that a federal criminal investigation of the borrower was imminent.
Mendoza’s bribery solicitation in May 2009 caused the borrower to contact the FBI. After the borrower delayed paying any bribe money, Mendoza ultimately agreed to accept $10,000 in cash. During two meetings in the borrower’s car in the parking lot of the Mall of Victor Valley, the borrower made two $5,000 payments to Mendoza. Following the second payment on June 29, 2009, special agents with the FBI arrested Mendoza, recovered the second $5,000 payment, and recovered from Mendoza’s wallet two $100 bills that were part of the first bribe payment.
Steven Martinez, Assistant Director in Charge of the FBI in Los Angeles, said: “Dishonest practices by bank employees corrode our banking system and, as evidenced by Mr. Mendoza’s conviction, can have serious consequences.”
Mendoza is scheduled to be sentenced on May 25. As a result of yesterday’s guilty verdicts, Mendoza faces a statutory maximum penalty of 95 years in federal prison.
“Suspicious activity reports filed by financial institutions with FinCEN provide some of the most useful information available to government authorities in criminal, tax or regulatory investigations or proceedings,” according to FinCEN Director James H. Freis, Jr. “This flow of highly confidential information among financial professionals, FinCEN, and law enforcement depends on the training and trust placed on industry and government officials alike. This case demonstrates the severe consequences that come with betraying that trust, disregarding the Bank Secrecy Act, and ignoring one’s duty as an employee of a financial institution.”
The Financial Crimes Enforcement Network is a bureau within the Treasury Department charged with partnering with the financial industry, law enforcement and regulators to protect the U.S. financial system from criminal abuse. FinCEN administers the Bank Secrecy Act, which is the federal anti-money laundering and counter-terrorism financing statute. The Bank Secrecy Act and FinCEN regulations require certain financial institutions, including all banks, to have Anti-Money Laundering programs in place and to report suspicious transactions and large currency transactions. FinCEN receives approximately one million SARs every year.
Friday 7 January 2011
Glitch leads to double charges
The bank said the problem was a system error in Lloyds TSB Cardnet terminals, and could affect anyone who paid with a credit card at a restaurant, bar or nightclub using the system to process credit card payments.
Lloyds released a statement saying cardholders would be reimbursed for any overcharges.
PayPal scammers targeted in US
According to an affidavit filed supporting a search warrant request, Winona State University students Tram Vo and Khoi Van are suspected of participation in the scam that has hit Amazon, Apple and Rosetta Stone among others.
The pair are accused of setting up over 150 eBay, and more than 300 PayPal, accounts using stolen identities. The accounts were used to sell items such as video games and iTunes gift cards worth over $1.2 million on the auction site.
To obtain the items they were selling, the men are alleged to have bought them directly from manufacturers using stolen credit card details, shipping the goods directly to the eBay buyers.
The stolen funds were then transferred from PayPal to dozens of bank accounts with banks such as Wells Fargo and HSBC before being moved on to Vietnam and Canada.
The affidavit, connecting Vo and Van to identity theft, money laundering and wire fraud is related to a US Department of Homeland Security investigation dubbed Operation eMule that has been running since 2009.
According to local press reports the search warrant was issued and computers seized from the men but charges have yet to be laid.
Reserve Bank of India's Draft Guidelines on Basle advanced measurement approach for calculating operational risk capital charge
The Reserve Bank had announced timeline for implementation of advanced approaches for computation of regulatory capital under the Basel II framework in India in July 2009. The guidelines for the standardized approach (TSA)/alternate standardized approach (ASA) for operational risk were issued in March 2010 and those for internal models approach (IMA) for market risk were issued in April 2010. The Reserve Bank had, in July 7, 2009, advised banks that they can, among other things, apply for migrating to Advanced Measurement Approach (AMA) for Operational Risk from April 1, 2012 onwards.
Friday 24 December 2010
New report on risk appetite frameworks and IT infrastructure
The report – “Observations on Developments in Risk Appetite Frameworks and IT Infrastructures” concludes that while firms have made progress in developing risk appetite frameworks and have begun multiyear projects to improve IT infrastructure, considerably more work must be done to strengthen these practices. In particular, the aggregation of risk data remains a challenge, despite its criticality to strategic planning, decision making and risk management.
The observations and conclusions in the report reflect the findings of initiatives undertaken by two SSG working groups. The risk appetite working group conducted a series of interviews with boards of directors and senior management of global financial institutions to gauge progress in risk appetite frameworks, while the working group that focused on IT infrastructure based its views on observations from a number of existing supervisory efforts.
This report represents a joint effort on the part of twelve supervisory agencies: the Canadian Office of the Superintendent of Financial Institutions, the French Prudential Control Authority, the German Federal Financial Supervisory Authority, the Bank of Italy, the Japanese Financial Services Agency, the Netherlands Bank, the Bank of Spain, the Swiss Financial Market Supervisory Authority, the U.K. Financial Services Authority, and, in the United States, the Office of the Comptroller of the Currency, the Securities and Exchange Commission and the Federal Reserve.
These initiatives were conducted to support the priorities of the Financial Stability Board, whose mission is to address vulnerabilities in the financial system and to promote global financial stability.
The report may be downloaded from the New York Fed’s website – click HERE to access.
Friday 15 October 2010
Human error blamed for Euronext outage
Operator error led to a shutdown of certain processes on trading units that match equities, bonds and ETFs, leading to a market outage during the afternoon.
During this time new orders were automatically rejected and the status of the order book unchanged. The exchange operator says it does not anticipate any trades being cancelled.
The problem was resolved by the end of trading, with all units available again at that time.
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