Compliance

Compliance activities can be summed up as continuous monitoring of compliance with a company’s legal and internal regulations. Area of compliance in the financial sector is very broad and sometimes difficult to grasp. We are one of the few offices in Czech Republic with such a long experience in compliance. Our office has specialized in compliance in the financial sector for several years.

Thanks to our advocacy background we can efficiently combine compliance with legal services. This means that we can deal with internal system controls, operational risk management, and anti-money laundering. We can also provide you with necessary agreements and contracts with your clients and partners or have them proof read for you. The combination of compliance with legal services can cover all legal regulations that your company facing.

Please have a look at our compliance references.

References

Definition of compliance

Compliance activities can be summed up as continuous monitoring of compliance with a company’s legal and internal regulations. Wider definition of compliance includes production of internal regulations, cooperation in the organization of internal operations, controls in customer service compliance and other enforceable obligations. According to Merriam-Webster dictionary compliance is understood as “conformity in fulfilling official requirements”. On an organizational level this is achieved through process management, which identifies requirements respectively (etc. regulations, agreements, strategies, and policies), assessment of compliance, risk assessment and potential sanctions in the case of non-compliance, and setting up rules and corrective measures.

Main areas of compliance

1. Organisation of internal operations

  • Internal operations have to be organised in order to comply with all legal requirements, this includes:
  • Quality and integrated internal company regulations – defining organizational structure, staff and external personnel competency
  • Set up of management and internal control processes
  • Development of risk management systems and processes
  • Development and compliance with AML measures

2. Providing services with professional care

Providing services with professional care means not only providing high quality services but also compliance with legal requirements. The main prerequisites are:

  • Assessment and compliance with personnel policy requirements (adequate education, knowledge, and experience)
  • Regular staff training
  • Internal regulations and guidelines
  • Internal control of customer service
  • Contracts between service provider and a client
  • Compliance with information duty towards clients

3. Communications with supervisory authorities of state administration bodies

Communication with supervisory authorities is key for better management practice in regulated areas. Communication with supervisory authorities includes:

  • Administrative licensing procedure
  • Compliance with information duty
  • Responses to queries
  • Keeping up to date with regulatory requirements

Compliance audit

Compliance comprise of wide range of services. Regulatory bodies requests these to be coordinated by people with experience in particular areas. When entering regulated areas of businesses, we recommend the construction of a so-called compliance map. Compliance maps (a map of regulatory requirements) include all the companies’ regulated areas of activity. The next step is to set up a compliance audit which will reveal whether a company complies with its regulatory requirements. The compliance audit outcome is in form of recommendations and measures which will ameliorate identified gaps and deficiencies.

Control of supervisory authorities

The person responsible for compliance should have enough experience to prepare their company for regulatory authority inspections (e.g. Czech national Bank, Financial Analytical unit of the Czech Ministry of Finance, The Ministry of Trade and Industry, Czech Trade Inspection). Inspections are held on an irregular basis and non-compliance with requirements can lead to financial sanctions or a license withdrawal. Quality compliance is the prevention of negative results from state inspections. An experienced person in compliance services can ensure that all requirements will be satisfied and nothing will be neglected. We therefore strongly recommend all companies making business in regulated areas to delegate their compliance activities into the qualified and experienced hands of external consultants.

Summary

Area of compliance in financial sector mainly includes:

  • Monitoring of current legislation of financial markets and their amendments
  • Monitoring of regulator decision making processes and the comparison of gaps and deficiencies of other companies within your business field
  • Internal regulations and guidelines compliance check
  • Compliance within companies’ area of activities legal and internal regulation
  • Internal control guidelines (managerial, linear, compliance, internal audit)
  • Operational risk management
  • AML measures
  • Staff and statutory institutions training and online consultations
  • Assistance during inspections and communication with regulatory bodies
  • Drafts of permits, licences and registrations applications, representation at proceedings in all variations of licencing in the financial sector at Czech National Bank (securities traders, payment institutions, small-scale payment service providers, investment mediators, non-bank loans providers, insurance providers etc.)