Conduct Risk

By Richard Walker, Senior Consultant, AcademyGlobal Pty Ltd

You don’t have to work in financial markets to be aware of conduct risk. There are a multitude of very public examples that illustrate the fallout when conduct risk goes wrong. The media is awash with stories about foreign exchange and LIBOR benchmarks rigging, and the multi-billion dollar fines levied by regulators.

The Australian Securities and Investments Commission (ASIC) is currently looking into the behaviours of institutions who participate in the benchmark BBSW.  Again, with a domestic focus, allegations of insider trading and suspected front-running at a major financial planner have received publicity; on prime-time television the ABC aired an investigative report into yet another prominent financial planning group; and individuals have recently been found guilty of insider trading. Perhaps most worrisome is that these are not isolated events, and it appears their occurrence grows every day.

Given the focus that domestic and international regulators are placing on conduct risk, organisations that are either unwilling, or unable to demonstrate that they are actively taking steps to eradicate misconduct can expect attention from their regulator.

Your call to action

Are you confident in your organisations ability to manage conduct risk? Academy Global offer a number of interactive risk management courses to improve the effectiveness of your risk management process.