PBI’s monthly summary of the latest key regulatory and compliance-related developments in private banking and wealth management.
European Commission vice-president says GDPR provides clarity
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The General Data Protection Regulation (GDPR), which offers people in the EU more protection on the use of their personal data, has come into effect. The regulation replaces the 1995 Data Protection Directive, offering EU consumers the right to gain access to data collected on them, and the intended use of the data. Companies are required to secure explicit consent from users regarding use of their data, and seek additional permission if the use of the data changes. The new rule also offers consumers the right to have their data deleted if needed, and requires companies to report data breaches to authorities within 72 hours, and also to affected users. European Commission vice-president for the digital single market Andrus Ansip said: “Our new data-protection rules were agreed for a reason: two-thirds of Europeans are concerned about the way their data was being handled, feeling they have no control over information they give online. “Companies need clarity to be able to safely extend operations across the EU. Recent data scandals confirmed that with stricter and clearer data protection rules we are doing the right thing in Europe.”
Companies directly involved with the processing of data, or having a headcount of over 250, are required to appoint a data protection officer to ensure compliance with the rule. Entities failing to comply with GDPR can be fined up to €20m ($23.6m) or 4% of their global turnover.
Credit Suisse to pay $47m fine for corrupt hiring practices in Asia
Credit Suisse has agreed to pay $47m to the US Department of Justice (DOJ) to settle allegations of corruption in hiring practices in the Asia-Pacific region. The allegations were regarding recruitments made by the bank in Asia between 2007 and 2013. The bank will not face any criminal charges in the case, and its second-quarter results will remain unaffected by the move as it has already set aside provisions for the penalty. Credit Suisse first came under scrutiny for its recruitment practices in Asia in February this year. Both the DOJ and the Securities and Exchange Commission (SEC) launched a probe, accusing the bank of hiring referrals from government agencies in order to win business and regulatory approvals, in violation of the US Foreign Corrupt Practices Act. The probe by the SEC is ongoing.
Commonwealth Bank to pay A$700m fine to settle money laundering charges Commonwealth Bank of Australia (CBA) has agreed to pay a fine of A$700m ($533.9m) to resolve allegations of violating anti-money laundering and counter-terrorism financing rules. The charges were brought by the Australian Transaction Reports and Analysis Centre (Austrac) in August last year. The financial
intelligence agency accused the bank of flouting the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act over 53,700 times, mainly associated with intelligent deposit machines (IDMs), and filed a civil suit against the bank. The regulator also charged the bank of failing to make an anti-money laundering risk assessment before launching the ATMs in 2012. Soon after the allegations, CBA CEO Ian Narev announced plans to step down from his role, while the Australian Prudential Regulation Authority launched an inquiry into CBA’s governance. CBA reportedly admitted to breaching the AML/CTF Act on 53,750 occasions. The bank said it failed to properly assess money laundering and terrorism financing risks of its IDMs before October 2017, and also admitted to the late filing of 53,506 transaction reports for transactions of $10,000 or more through its IDMs from November 2012 to September 2015. It said that it failed to monitor transactions on 778,370 accounts for three years, and also failed to report suspicious matters on time or at all for transactions in the tens of millions of dollars. As part of the settlement, which is subject to court approval, CBA will also pay Austrac’s legal costs of A$2.5m.
Nomura secures licence for new Frankfurt subsidiary Japanese investment bank
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By GlobalDataNomura has obtained a securities trading licence from German financial regulator BaFin for its new Frankfurt-based unit. The new unit, Nomura Financial Products Europe, will act as the bank’s EU base after Brexit. The bank applied for a licence for the new entity in June last year. Nomura currently has a workforce of over 2,000 in London. The bank has not revealed the number of roles that will be moved to Frankfurt in the wake of Brexit. Frankfurt has emerged as one of the most-preferred options for financial services businesses looking to secure operations once the UK leaves the EU. This includes Japan’s Sumitomo Mitsui Financial Group and Daiwa. The German city has also been selected as the post-Brexit EU base by Morgan Stanley, Standard Chartered and Goldman Sachs.
