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Integrity Programmes in Financial Services Providers: A New Era of Compliance

The financial services industry is no stranger to regulatory challenges, but recent developments have brought new complexities to the forefront. As Argentina’s Corporate Criminal Liability Act and Guidelines come into effect, local Financial Services Providers (FSPs) must adapt their integrity programmes to avoid costly mistakes.

Exchange Rate Risks: A Simple yet Significant Concern

  • A US$50 limit per permissible gift may seem like a small amount, but its value can vary significantly depending on the location.
  • In Zurich, it’s a modest gesture, while in Argentina, it could be considered an opulent gift. This highlights the importance of considering local nuances when designing integrity programmes.

Termination of Employee Agreements: A Complex Issue

  • The ability to terminate an employee agreement due to an Anti-Bribery and Corruption (ABC) matter can have significant consequences.
  • Wrongful adaptations may not only result in reputational damage but also financial penalties. FSPs must ensure that their policies are tailored to the local reality.

Third-Party Due Diligence: A Key Component

  • When dealing with third parties, business associates, or intermediaries, FSPs must conduct thorough due diligence to assess their integrity and trajectory.
  • The Corporate Criminal Liability Act attributes broad liability for acts carried out in the name, interest, or benefit of an undertaking.

Periodic Risk Assessment: An Ongoing Necessity

  • As financial businesses evolve with new technologies and regulations, FSPs must conduct regular risk assessments to ensure the adequacy of their programmes.
  • This is particularly crucial for fintechs, which are often at the forefront of innovation.

Tone from the Top: Visible and Unequivocal Commitment

  • Top management’s commitment to integrity programmes must be clear and unequivocal. This sets the tone for the entire organization and ensures that all employees understand the importance of compliance.

Internal Investigations: A Delicate Matter

  • When conducting internal investigations, FSPs must ensure that investigators are aware of the implications of accessing private records, such as bank accounts.
  • Any violation of privacy and bank secrecy laws can have severe consequences.

The Role of an Internal Officer: A Key Function

  • Large companies may benefit from having a dedicated individual or team to develop and monitor integrity programmes. Smaller companies can also designate a single officer to oversee this critical function.

As Argentina’s financial services industry continues to evolve, FSPs must prioritize integrity programme development and implementation. By doing so, they can mitigate risks, protect their reputation, and ensure compliance with the Corporate Criminal Liability Act and Guidelines.