Conflicts of Interest - A Guide For UK Financial Services
What you'll learn
- Definitions of conflicts of interests
- Identifying and recording interests
- The relevant legal framework surrounding conflicts of interests
- Conflicts of Interest and Ethical Threats
- Ethical Threats and Safeguards
- Rules - and principles-based approaches
- Ethical conflict resolution
- Gifts, sponsorship and hospitality
- Best practice
- How to make decisions on identified conflicts
- The risks around getting it wrong
- Tools for managing/Mitigating CofI
- Must be a FCA registered individual
Primarily written for the UK market and legislation, the application can be applied globally.
Definitions of conflicts of interests;
A conflict of interest is a situation in which an individual has competing interests or loyalties. Conflicts of interest involve dual relationships; one person in a position in one relationship and a relationship in another situation. A conflict of interest can exist in many different situations. The easiest way to explain the concept of conflict of interest is by using some examples:
with a public official whose personal interests conflict with his/her professional position.
with a person who has a position of authority in one organization that conflicts with his or her interests in another organization
with a person who has conflicting responsibilities.
Types of activities that can create a possible conflict of interest include:
Nepotism is the practice of giving favours to relatives and close friends, often by hiring them.
Self-dealing is a situation in which someone in a position of responsibility in an organization has outside conflicting interests and acts in their own interest rather than the interest of the organization.
Remember, The interests of a party receiving a service and the party providing it are of course never completely aligned. In the client’s ideal world they would receive your services free of charge and would buy your assets from you at cost. Legitimate business interests are not the target here. Conflicts arise rather when there is an imbalance of power, information or resources whose existence is known to one party but not the other, and is exploited to the detriment of the latter.
Conflicts of Interest in the Workplace
Here are some workplace situations in which conflicts of interest in the workplace occur:
An employee may work for one company but he or she may have a side business that competes with the employer. In this case, the employee would likely be asked to resign or be fired.
A common workplace conflict of interest involves a manager and his or her employee who are married or dating and have a relationship. This is a conflict because the manager has the power to give raises or promotions to the employee. Discussions about the company between the two people may also breach confidentiality restrictions.
An employee who has a friendship with a supplier and allows that supplier to go around the bidding process or gives the supplier the bid.
A former employee may take his former company's customer list and directly compete. Non-compete agreements are often required of executives and business owners for this reason.
Conflicts of Interest by Boards of Directors
Members of a corporate board of directors sign conflict of interest policy statements. If a board member has a conflict of interest, he could be kicked off the board and possibly sued. For example, if a board member has a sexual relationship with an employee, or if he is taking business away from the company and giving it to others.
A common conflict occurs when a board member hears of a potential deal that might affect the selling price of company stock (up or down). The board member's attempt to profit from this knowledge is called insider trading; it's illegal as well as being a conflict of interest. Objectives
To be able to identify conflicts of interest effectively in a timely, professional and first-class manner
To appreciate the ethical approach to conflicts of interest and why it is critically important
To understand the legal and regulatory framework
To recognise the need for a clear line of communication between operations and senior management for managing conflicts of interest
To recognise good practice
To avoid poor, sloppy or ineffective management of conflicts of interest
Be able to define an effective and comprehensive conflicts of interest policy
Learn how to identify unexpected consequences or hidden conflicts of interest
Be able to identify the best response
Be able to create a clear and auditable method for managing conflicts of interest to ensure transparency
Think like a compliance professional and make sure you have all the right information
Where Are The Conflicts?
What is a Conflict of Interest?
Briefly Touch On Regulatory Requirements
Types of Conflict
Regulatory, Legislative and Ethical Requirements
Business Ethics and Ethical Business
Examples of Ethical Dilemmas
Ethical responses and Conduct Risk or TCF
Rules - and principles-based approaches
Ethical conflict resolution
Gifts, Sponsorship and Hospitality - Inducements
Managing Confidentiality Arrangements
WORKSHOP - CofI in Practice
The Risks Around Getting it Wrong.
Think Like A Compliance Professional
Who this course is for:
- FCA registered individuals
- FCA registered firms
- FCA authorised person
- FCA regulated businesses
- PRA regulated businesses
Lee has worked with a range of organisations from small start-ups through to FTSE100 companies, many that have had difficulties identifying and managing governance, compliance and operational risk, and helped them develop effective, robust systems. He has adapted his experience from working with banks in the original Senior Managers and Certification Regime (SMCR) to develop this course and supporting materials with the practical skills based focus.
Lee has worked with many firms in the areas of regulatory change and uses his knowledge to provide you with the facts and workable solutions to the SMCR and it's implementation. Our clients include IFA networks and directly authorised firms, as well as insurers, asset managers, AIFMs, stockbrokers, banks, fintech start-ups, Claims Management Companies (CMCs), Consumer Credit Act companies (CCA) as well as call centres and a number of companies outside the financial services industry.
Lee’s skills, qualifications and experience make him ideal for supporting anyone wishing to develop top-class knowledge in the management of regulatory change.