Moore Stephens Warns Brokers

Tuesday, September 06, 2005
Financial and insurance consultant Moore Stephens has warned brokers and other intermediaries to ensure that their systems and controls covering the treatment of client money meet the regulatory requirements laid down by the Financial Services Authority. Moore Stephens notes that the FSA has recently visited the offices of 15 intermediaries and reviewed their handling of client money, in addition to addressing the issue in a similar number of risk assessments involving other firms. The FSA has written to the chief executives of all general insurance intermediaries with its findings, and this will doubtless make uncomfortable reading for brokers and intermediaries.

The FSA recognizes that its client money rules represent a significant change for general intermediaries, but says it is nevertheless 'disappointed' to find a large number of failures in systems and controls. This has prompted the FSA to ask all firms to revisit the systems and controls that they have in place to monitor their compliance with client money rules, with particular reference to weaknesses identified.

These weaknesses include, in the most extreme case, a firm that had a deficit in its client money account of which it had not previously notified the FSA, and which could not be rectified. This resulted in direct regulatory intervention and, although it concedes that this was an isolated case, the FSA says it uncovered a number of issues at other firms, including a failure to ensure that any shortfall or excess recognized when performing client money transactions was either paid into or taken out of the client money account by the close of business on the day of calculation.

The extensive list of weaknesses uncovered during the FSA visits also included a failure by some firms to ensure that balances on their broking system agreed with accounting systems, and therefore with the figures used in the client money calculation.

Among a number of other things, the FSA has specifically asked intermediaries to ensure that client money accounts are not in deficit, and have the correct trust status. It has emphasized that client money resource calculations are performed on a regular and timely basis, at least every 25 business days, and that client money account balances are reconciled with the balance set out on statements issued by banks within ten business days of performing the client money calculation.

Intermediaries have also been asked to ensure that any shortfall or excess is either paid into or out of client money accounts by close of business on the day of the client money calculation; that the status of firms' client money accounts agrees with the Terms of Business Agreements concluded with insurers, clients and others brokers; that balances recorded in broking and general ledger systems and used in the client money calculation are in agreement; and that client money from appointed representatives is correctly accounted for. Moore Stephens partner Simon Gallagher says, "Intermediaries could soon face visits from the regulators during which they will be asked to provide documentary evidence that they have complied with the FSA's requirements. And they will need to be sure that they are fully acquainted with exactly how they account for money paid to them by their clients, or else face the consequences."

Maritime Reporter February 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Finance

Some Roads Reopened in Brazil, Truck Strike Persists

Striking truckers lifted their blockade of dozens of highways in Brazil after police began fining and arresting protesters, though strike organizers said they had

Lithuania Looks to U.S. for Gas

Lithuanian liquefied natural gas (LNG) importer Litgas has signed a preliminary agreement with a U.S. supplier, looking to lessen the Baltic nation's dependence on Russia.

Petrobras Denies Hiring JPMorgan for License Sales

Petróleo Brasileiro SA denied on Friday that it has hired JPMorgan Chase & Co to handle the sale of oil exploration licenses in deep-sea areas off the coast this year.

Salvage

Lysblink Seaways to Be Towed to Shelter

Cargo ship Lysblink Seaways, which ran aground on Scotland’s west coast February 18, will be transported to shelter this afternoon after a successful ship-to-ship

Fuel to Be Pumped from Grounded Cargo Ship

The ship to ship transfer of the fuel oil from the grounded cargo ship Lysblink Seaways is scheduled to begin tomorrow morning as better weather conditions provide a work window between 3 a.

70 Dead in Bangladesh Ferry Collision

At least 70 people died when a ferry carrying 150 passengers and crew capsized after colliding with a trawler on a river in central Bangladesh, police said on Monday.

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Navigation Pipelines Pod Propulsion Port Authority Salvage Ship Electronics Ship Repair
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1738 sec (6 req/sec)