Research Handbooks in Financial Law series
Edited by Barry Rider
Chapter 24: Compliance – the risks and obligations
This chapter is concerned with law and regulation in the United Kingdom that is directed at financial services businesses for the purpose of countering financial crime. (For convenience in this chapter a financial services business will be referred to as a ‘firm’). In many respects such law and regulation creates obligations not to engage in predicate offences and is supported by the prospect of either prosecution or administrative regulatory action for those firms that do. It can be identified, however, that certain offences operate within a framework of law and regulation which additionally imposes upon a firm an obligation to establish and operate systems of control, for the purpose of limiting the extent to which it might engage in or be used for the offence in question. Moreover, such regulation is often supported by an enforcement outcome where a firm fails to meet the internal control requirements. This chapter will thus examine both criminal law and administrative law compliance enforcement. Financial Services regulation can be described as giving rise to a regime for ‘compliance’, where non-compliance may be seen as a risk to a firm’s lawful obligations. This chapter will however illustrate that compliance risk is more dynamic and complex than a simple binary question of compliance versus non-compliance.
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