New Course: Anti-Money Laundering 2020 (including 5MLD changes)

Meet your annual AML training obligation with the ISS online Anti-Money Laundering Update. This short course is tailored specifically to those working in the insolvency profession and includes:

• An overview of the key changes to the above, by virtue of the 5th European Money Laundering Directive (5MLD)
• A refresher on key elements of the UK’s Anti-Money Laundering and Terrorist Financing regime, to include:
o Identifying risks
o Client Due Diligence / Enhanced Due Diligence
o Suspicious Activity Report

Knowledge checking

To reinforce learning values the course includes individual knowledge checking, so you can be assured that that each member of your team is alive to the risks they face in their role and can play their part in controlling these risks to your practice.

Individual certification

Each participant receives their own personalised certificate of completion in order that you can evidence that you have addressed the training requirements contained in the Money Laundering Regulations to your AML Supervisor.

This course is aimed at insolvency personnel and relevant support staff and is suitable for people with varying levels of pre-existing knowledge and technical ability.

Flexible completion and progress tracking

Individual registrations may commence at any time, to cater for work flows and new joiners within your firm. The time available for completion can be determined by you to suit your business (we recommend allowing around 4 weeks from registration) and to ensure everyone fully engages with their training, we will provide you with updates on participation and completion.

Cost

Individual – £75

5-person package – £200

20-person package – £700

50-person package – £1,500

All prices are exclusive of VAT at the prevailing rate.

Book Your Place

For enquiries and bookings, email: courses@insolvencysupportservices.com

ISS Training announces 2020 JIE Programme

We are delighted to announce our 2020 JIE Programme.  Click here for comprehensive details.

At ISS Training we pride ourselves on the quality of our material, the depth of our practical experience as IPs and our ability to translate both into exam success for our candidates. Face-to-face tutorials get results.

Our JIE courses are structured in three-day modules, taught face-to-face, and designed to cover the relevant legislation and the exam syllabus in depth. We include detailed notes to aid learning and revision and we also look at practical issues faced when taking appointments, current issues in insolvency and the impact of recent judicial decisions.

Our programme also includes mock exams, which we will mark and return with individual written comments on technical ability and exam technique. We also provide individual coaching and support self-study throughout the year.

Candidates will be examined on legislation in force as at 30 April 2020.

Book your place

Email to book your place: courses@insolvencysupportservices.com

Alternatively, should you have any questions in relation to these courses, please feel free to contact us via the email above or give us a call on 0845 601 7570.

 

 

 

 

ISS Training launches CPPI England & Wales Training for 2020

ISS Training is delighted to launch a brand-new offering: CPPI training for England and Wales, starting February 2020. We have two options: a distance learning course and our full course, which includes online learning and four days of face-to-face training. For comprehensive details of both options, click here.

The IPA’s Certificate of Proficiency in Insolvency exams are designed to test and demonstrate competency in insolvency administration. CPPI concentrates solely on personal insolvency and non-insolvency debt solutions.

Study at a consistent pace, with support throughout, to maximise your chances of success. Our courses offer periodic testing to reinforce knowledge – we are the only training provider to do so.

The next CPPI E&W exam is in June 2020, and our first programme is designed to meet the learning requirements of any student working towards that sitting.

Book your place

Email to book your place: courses@insolvencysupportservices.com

Alternatively, should you have any questions in relation to these courses, please feel free to contact us via the email above or give us a call on 0845 601 7570.

 

New One Hour Series for 2020

Our webinars have proven extremely popular since we launched them in 2017, so we are delighted to announce a brand new One Hour Series for 2020.

Meet your CPD requirements without even stepping away from your desk. Or multi-task and view them on the go!

You can pick the individual sessions that suit your needs, or you can choose a stream:

Protecting your Licence:
• Changes to the Code of Ethics – 31 January 2020
• SIP 11 and Financial Controls – 24 April 2020
• Conducting firm-wide AML risk assessments – 26 June 2020

Technical Short:
• The return of HMRC preferential status – 28 February 2020
• SIP 2 and investigations into conduct – 27 March 2020
• Books and Records – balancing competing requirements – 30 October 2020

Business Insolvency:
• Employees Rights and Claims – 29 May 2020
• Health and Safety basics for IPs – 25 September 2020
• Understanding Environmental Risks – 27 November 2020

CPD Learing Outcomes

• Clear concise update on legislation and regulation in respect of the subject matter under the spotlight.
• An understanding of how these requirements impact on your day to day work.
• The confidence to apply your newly learned skills in the workplace.

Speakers

Alison Curry LLB Hons MIPA MABRP
Director of Insolvency Support Services Limited

Eileen Maclean MA Hons MIPA MABRP MBA
Director of Insolvency Support Services Li

Cost

£50 + VAT per person per webinar. 50% reduction for every third one hour session you book.

Book Your Place

Email: courses@insolvencysupportservices.com

Phone: 0845 601 7570

Get ready for the 5MLD – more AML changes ahead!

The insolvency profession has now largely got to grips with the provisions of the Money Laundering Regulations 2017 (MLRs) and implementing the Fourth Money Laundering Directive (4MLD) into UK law on 26 June 2017. But are we sufficiently prepared for yet another set of AML changes (5MLD) that are just around the corner?  What do you need to do as an IP to prepare?  Insolvency Support Services director Alison Curry sets out the issues.

Background

In February 2016 (before it was even enacted) EU Member States agreed to revisit some areas of 4MLD, in light of revelations from the Panama Papers. This resulted in the 2018 Fifth Money Laundering Directive (5MLD), which the UK is committed to enacting into UK law by 10 January 2020, irrespective of any Brexit outcome.

Although the HM Treasury 5MLD consultation closed on 10 June 2019, at the time of writing, the outcome of that consultation is yet to be published, and the precise terms of implementation are far from fully crystalized. Given the general election, it’s clear that firms will have a very limited window to implement any necessary changes to their internal AML policies and procedures.

So how can we prepare?

Some changes are reasonably certain: the categories of AML-regulated business are to be extended; there must be greater transparency around beneficial ownership; express provision will be made for the risks presented by virtual assets (or cryptoassets) and enhanced due diligence (EDD) measures will need to be conducted more broadly where transactions involve high risk third countries. Some basic preparation can therefore be made in light of these known quantities.

Due diligence

5MLD mandates that electronic verification should be used wherever possible in the customer on-boarding process and firms will need to migrate from traditional physical identification procedures.

There will be increased expectations to conduct enhanced due diligence to assess business relationships and transactions involving high risk third countries.  A good starting point will be to ensure staff access the ever-changing Financial Action Task Force (FATF) and EU High Risk lists online, rather than referring to downloaded lists that may not be current.

Transparency obligations

Member states will be required to develop public ownership registers and the UK has already implemented the Persons with Significant Control register. However, internal policies for identifying ultimate beneficial owners should be reviewed and robustly applied, particularly when dealing with high risk third countries or jurisdictions where there is a lack of transparency.

Member states must keep an up-to-date list of the exact functions that render an individual to be a Politically Exposed Person (PEP) and the prominent functions of any international organisations they host. This should make PEP identification simpler, provided that your service provider is working from current data.  Remember also that PEP lists may not be available for countries outside the EU.

Expanded categories of regulated persons

The implementation of 5MLD will bring within the AML regime tax advisers, letting agents (where the monthly rent is €10k or more) and art dealers (when transacting in sums over €10k). These persons (legal or natural) will be conducting regulated activities and obligated to conduct Customer Due Diligence. 5MLD also ensures that all estate agency, book-keeping, accountancy and legal professionals across the EU are subject to regulation (which has been the case in the UK for some time). UK IPs will need to consider the risks presented in dealing with the insolvency of such businesses and any concerns about that business’s AML compliance.

Virtual assets and virtual asset service providers

5MLD will extend to virtual asset service providers, who will become regulated entities over whom the Financial Conduct Authority will assume supervisory responsibility. The regulations will also cover transacting in virtual assets.

However, combating money laundering and terrorist financing activity is a fast-paced global activity and whilst the UK is occupied in responding to incoming EU legislation, global bodies are busily publishing guidelines that render EU Directives potentially out-of-date before they are even enacted domestically.

On 21 June 2019, the FATF updated its recommendations for the application of its globally applicable standards to virtual asset activities and service providers, and the HM Treasury consultation posed the question whether the EU’s 5MLD definitions were sufficiently broad in the light of various more recent recommendations. Even the language has shifted from “virtual assets” to “cryptoassets”.

While there remains some uncertainty as to the precise form the new UK regulations will take, it is apparent that this sector and transactions involving cryptoassets will be formally classified as “high risk”.  Your internal transactional risk assessments will need to be amended accordingly and staff made aware that this is red flag area. CDD of counterparties to cryptoassets transactions will be required and insolvent entities who have been transacting in cryptoassets will warrant closer scrutiny. The FATF updated guidance for a risk-based approach to virtual asset services providers and transaction will be a “must-read” for your MLRO.

 

Need help? Insolvency Support Services provide tailored training solutions for insolvency firms in AML and other key compliance areas. Contact us at enquiries@insolvencysupportservces.com to discuss your firm’s requirements.

First published in the December 2019 edition of RECOVERY NEWS and reproduced with the permission of R3 and GTI Media.

Celebrating Living Wage Week 2019

As one of 1,648 Living Wage accredited employers in Scotland, Insolvency Support Services is delighted to be joining the annual celebration of the Living Wage movement in the UK this week.

More about Scottish Living Wage: https://scottishlivingwage.org/

 

Burial jobs – Transparency v. Efficiency?

Alison Curry examines the differing approaches adopted north and south of the border to CVL closure and court involvement.

For over a decade, the buzzword across regulation has been ‘transparency’. The BBC’s complaints handling processes were recently accused of lacking it and the Insolvency Service has just consulted on whether those applying its regulatory objectives are sufficiently meeting it. We are told by the policy makers that the periodic reporting requirements placed on IPs are intended to ensure it.

But in the case of no or low-assets jobs, there is surely a balance to be struck between the ‘mahogany open-casket’ approach of providing chapter and verse to a disengaged creditor cohort and the benefits of an efficient ‘economy burial’; and it seems we may be striking that balance at a different point in Scotland than we are in England and Wales.

Comparable systems

Both in Scotland and in England and Wales, comparable systems for liquidator appointments by deemed consent in CVL now exist; SIP 6 reporting requirements are identical (and identically, largely optional) and annual reporting has replaced annual meetings. The debate around whether these measures promote creditor engagement is now well rehearsed and I shan’t reprise it here!

But where there is a marked difference (and one that I have no doubt my English colleagues will be as surprised at as I was to discover) is in the manner in which a Scottish CVL may be concluded without the need or cost of a final report to creditors.

This is perhaps an unintended consequence of historical national differences in the approach to corporate insolvency administration. As there is no Official Receiver in Scotland, s138 IA1986 requires a liquidator to be appointed by the court upon the making of a winding-up order (a clearly sensible provision to ensure there is always a liquidator in office). The provisions of s203 IA 1986, which allow the Official Receiver to be released from office without the need for a final report (or final meeting, as was), have a parallel provision in s204, which applies to the private practice liquidators of Scottish companies in compulsory winding-up proceedings. They may apply to court for early dissolution ‘if it appears to the liquidator that the realisable assets of the company are insufficient to cover the expenses of the winding up’ – ie without going through the final reporting process. How is this relevant to final reports in CVL cases, I hear you ask?

Well, under s112 IA86, a liquidator, creditor or contributory can apply to court to determine any question arising in the winding up of a company – be that an MVL, CVL or compulsory matter. The court, if satisfied that the required exercise of power will be just and beneficial, may make such order as it thinks just.

Court involvement shivers

Scottish practitioners are quite accustomed to levels of court involvement in their cases that would send a shiver down the spine of their English and Welsh counterparts. The court system is customarily involved in the remuneration approval process and routine applications are made at a level of costs and determined with a timeliness that does not have the same dissuasive impact that the spectre of approaching the English courts holds.

S112 provides the court a very broad discretion and one that forms the basis of routine applications in CVL cases in Scotland, including those for early dissolution under s204. By stark contrast, s112 appears to be little used in England and Wales. Reported cases appear to be few and far between, and typically involve cases of substantial potential value. For example, in Rubin v. Cohen & Crooks [2017] (a dispute between successive liquidators about the availability of funds to meet 1,796 separate statement of affairs fees), there were fees totalling £2.9m at stake. Another reported case concerned the disclosure of documents by an English liquidator to the USA trustee in the Bernard Maddoff case.

What the nature of these cases illustrates is that matters don’t often get as far as the courts in England & Wales unless there are some pretty big numbers involved. Curiously, it’s the polar opposite of the justification for making such an application in Scotland to apply s204 as an alternative to the delivery of a final report to creditors: that of costs and efficiency.

Swift cremation

The practice of applying for early dissolution under s204 in Scottish CVL cases must beg questions about consistency across the UK of the CVL process, if not its transparency. It is quite feasible that creditors will receive no substantive information in this scenario, as most of the SIP 6 information requirements are not mandatory and the s138 reporting requirements in the compulsory process do not apply to CVL cases. Depending on timing, a Scottish CVL matter can proceed to a swift and economic cremation, potentially without any form of report having been issued to creditors. Whether the court demands a report is entirely at the court’s discretion but is not normally required. Maybe, having spotted the ‘gap’, that might change?

Economically speaking, this could be viewed as a good idea. If efficiencies like these lead to reduced costs, surely that is a tick in the box for the regulatory objective of a competitive profession? It remains to be seen what approach the courts will be to such applications, particularly if no SIP 6 report was issued, or what regulatory expectations will evolve. But for now, at least, the balance in Scotland seems to be for efficiency over transparency.

Alison Curry is an insolvency practitioner, trainer and director at Insolvency Support Services Limited.

Insolvency (Scotland) Rules – 6 Months On

Join Eileen Maclean for one of our Insolvency (Scotland) Rules – 6 Months On Technical Update courses to find out more about developments under the new rules. For further information or to book a place, contact courses@insolvencysupportservices.com

First published in the October 2019 edition of RECOVERY News and reproduced with the permission of R3 and GTI Media.

Sample materials for Compliance Awareness Online Learning

You can preview the different types of content included in our new modular Compliance Awareness Online Learning course in our free samples. They will take just a few minutes to view or complete. Click here to access the free samples.

Instructional video content

Concise, comprehensive videos that you can watch, learning when and where is most convenient for you.

Reference materials and handouts

Downloadable documents to read and keep for future use and reference.

Knowledge checks

Multiple-choice knowledge checks to reinforce the value of the learning.

To sample the Ethics and Professional Standards Quick Quiz, register as a user with your name and email address.

Course Modules

Our Compliance Awareness Online Learning course is delivered in four modules, which you can mix and match to cater for your practice’s needs:

1.      Anti-money laundering (AML)

2.      Data privacy (GDPR)

3.      Vulnerability awareness

4.      Ethics and professional standards

Click here or below to watch our one-minute introductory video.

To find out more, click here, call 0845 601 7570 or email courses@insolvencysupportservices.com

 

 

ISS Training launches Compliance Awareness Online Learning

Insolvency Support Services’ training division, ISS Training, has launched an innovative new Compliance Awareness Online Learning course, adding an online learning platform to the firm’s course delivery methods.

The course is delivered in four topical modules: anti-money laundering, data privacy, vulnerability awareness, and ethics and professional standards.

Alison Curry, a director of Insolvency Support Services, commented: “We have developed this course in this format to assist insolvency practices manage compliance risks cost-effectively, meet their training obligations and protect their firm’s reputation.

These days insolvency practitioners and their teams must have a sound knowledge of practice areas beyond the scope of technical insolvency training.

There have been significant legislative changes in the areas of anti-money laundering and data protection, vulnerability awareness is high on the political agenda, and ethics and professional standards issues continue to dominate the complaints mailboxes of the regulators.

If all team members have a good grasp of the essentials of these subjects, they can flag issues with their managers as they arise. Failing to identify an issue in a timely manner presents a risk to the practice that can result in reputational damage to the practice and regulatory sanction for its insolvency practitioners.”

More information about Compliance Awareness Online Learning  including an introductory video and sample content, can be found here.

Managing risk in your practice

Effective compliance awareness

A frequent observation among our clients is how, increasingly, insolvency practice seems to be less about applying the Insolvency Act and rules and more about meeting other obligations; whether it be anti-money laundering (AML), GDPR, vulnerability awareness or the ever-evolving expectations of the regulators.

But ensuring you and your team have a good level of awareness of these peripheral aspects of our day-to-day work shouldn’t be seen as a distraction from the real task at hand – it is central to controlling risk presented to your business. And in some cases, such as AML and data protection, it is a legal requirement. Embedding a culture of compliance awareness, that is routinely acted upon throughout the firm within daily tasks, acts to nip potential issues in the bud. So, what can you do to manage risk in your practice?

Effectively managing risk is essential to success

Risk management is defined as the forecasting and evaluation of financial risks, together with the identification of procedures to avoid or minimise their impact. The requirement to assess various forms of risk has become a recurring theme in many areas of law and regulation. While it can all seem somewhat nebulous, getting it wrong can be costly in terms of time, fines and penalties and reputational damage to you and your firm.

Models for managing risk identify four key strategies: avoid, control, accept and transfer. The risk acceptance strategy (i.e. just accept any penalties if and when they arise) isn’t a viable option for a licensed professional, not least given the gravity of the risks we manage and the severity of the potential punishments that can be meted out by the likes of the Information Commissioner’s Office (ICO) or the Financial Conduct Authority (FCA). Given the personal nature of insolvency licensing, the opportunities for risk transference are limited to those that can be insured against, and avoiding risk entirely isn’t likely to result in the acceptance of many appointments. So practically speaking, we are left with the option of controlling the risk we face, as best we can.

Start with the known unknowns

None of us have a crystal ball. The “unknown unknowns” (unexpected or unforeseeable conditions) will pose a potentially greater risk simply because they cannot be anticipated based on past experience. Challenging circumstances will necessarily occur from time to time. This is where robust internal policies and procedures come in and the assistance of lawyers and specialist advisers will be called upon.

However, on a daily basis there are “known unknowns” that we can better manage by improving our understanding of what is expected of us and what to look out for. In key compliance areas it isn’t just the licensed professional that needs to be alive to the risks, everyone has a part to play in the risk management process, whether that be in detecting a financial crime, keeping personal data private, meeting the needs of a vulnerable client or maintaining expected professional standards requirements. A chain is only as strong as its weakest link.

Knowledge is power

When it comes to managing risk, you can only really do so if you are aware of the form those risks might take and what is expected in terms of response. Experienced practitioners will have an inherent understanding of the risks in an appointment, built upon their years of experience, and their internal alarm bells will ring when they detect something out of the ordinary. That knowledge is applied almost subconsciously and not always articulated to those around them. We need to share the key elements of that knowledge and experience with the entire team in order to maximise its effectiveness on risk management. Training the team need not be costly, unduly time consuming nor disruptive to the business, and can yield significant benefits. And we can help you do that.

It’s not entirely optional

The Data Protection Act 2018 and the Money Laundering Regulations 2017 contain mandatory staff training requirements. The FCA is currently consulting on further guidance around the treatment of customers in vulnerable circumstances which places a strong emphasis on the need to upskill client-facing staff. While FCA regulation has not come to us all just yet, it gives a clear steer on the directions of travel for regulatory expectations when dealing with those in vulnerable circumstances. And that may include directors and employees, not just indebted individuals.

Also sometimes overlooked are the expectations of the Ethics Code; which states up front that “Although an insolvency appointment will be of the insolvency practitioner personally rather than his practice, he should ensure that the standards set out in the Code are applied to all members of the insolvency team.” Realistically, the team can only do that if they are equipped with a basic knowledge of what professional standards are expected of insolvency practitioners and why.

We can help

We can help your team manage these key compliance risks with the New ISS Compliance Awareness Online Learning Course. For further information contact: courses@insolvencysupportservices.com

First published in the August 2019 edition of RECOVERY News and reproduced with the permission of R3 and GTI Media.