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eimf Talks

Robotics and Financial Advice

Date: 27 November 2018  |  Time: 18:00-20:00  |  Location: EIMF Nicosia  |  CPD: 1

Everyone is mad about robots and what they could achieve in the retail financial services area!   The thinking is that in the future, you could just enter your personal data, attitude to risk and investment timescales and come away with a lovely investment to meet your needs without the costs, bias or fallibility of a human.

 

This Public Lecture looks at the compliance implications of robotics in this area and asks whether this is just yet another example of extravagant claims for types of automation we’ve been looking at for years.

 

In this short lecture we will be looking at how compliance interacts with robots while brushing up everyone’s knowledge of retail compliance.

Understanding what robots are

  • What MiFID II might have to say about robots
  • The nature and responsibilities involved in compliance and robotics

 

What’s the point? 

  • Cost and variable adequacy of financial advice
  • The element of subjectivity in advice
  • Poor quality of suitability reports

 

Robotic Offerings

  • Non-advised transactions and plugging in of personal characteristics or requirements
  • Simplified or basic advice – responses to set questions
  • Fact-finding and risk assessments
  • Trading platforms
  • Regulatory and MiFID issues

Implications of robotics

  • Systems and controls issues – data security and IT management
  • Human checks on both firm and customer inputs and robotic outputs
  • Record-keeping
  • Complaint handling and litigation about the robot offering or performance

 

Looking forward

  • Automation has a history
  • Humans are responsible for the programming and outputs
  • Robotics seen as a less intrusive entry to financial services

Adam Samuel is a lawyer qualified in the UK and the USA. Since 1996, Adam has run his own training and consulting business, helping out regulators in three continents on customer-facing issues. He has the qualifications required of a financial, mortgage and equity release adviser and the UK CISI compliance diploma. Adam wrote the only book on consumer financial services complaint handling in the UK and a guide to the SFC Code for Intermediaries in Hong Kong. The Gibraltar Supreme Court followed his expert evidence in van Geens v. Jyske Bank on product risk, compliance and advice standards around the world. Adam has broadcast on a number of BBC domestic and World Service programmes, including the national news, on financial services compliance and banking issues.

The Fit and Proper Rules for the Members of the Boards of Directors

Date: 30 November 2018  |  Time: 18:00-20:00  |  Location: EIMF Nicosia  |  CPD: 1

According to MiFID II, CRD IV and the EBA/ESMA Guidelines there are suitability requirements for the members of the Boards of Directors of investment firms and credit institutions.

 

In fact, the guidelines, which apply from 30 June 2018, specify the requirements regarding the suitability of members of the management body of credit institutions, investment firms, financial holding companies and mixed financial holding companies, so let’s take a brief look at what they are and what this means in practical terms.

Member of the management body – consider the notions of:

  • sufficient time commitment
  • honesty, integrity and independence of mind of a member of the management body

 

The management body – consider the notions of:

  • adequate collective knowledge,
  • skills and experience of the management body
  • adequate human and financial resources devoted to the induction and training of such members

 

The selection of the management body – consider the notion of:

  • diversity

Other important aspects

  • the suitability of the heads of internal control functions and the chief financial officer (CFO) of credit institutions and certain investment firms (where they are not part of the management body)

 

  • and, where identified on a risk-based approach by those institutions, of other key function holders, as part of the governance arrangements referred to in Articles 74 and 88 of Directive 2013/36/EU and Articles 9(3), 9(6) and 16(2) of Directive 2014/65/EU, and on the related assessment processes, governance policies and practices, including the principle of independence applicable to certain members of the management body in its supervisory function.

 

A Hot issue

  • Has CySEC and Central Bank have taken the above into account?

Dr Christina Livada is a Lecturer of commercial law at the Faculty of Law of the National and Kapodistrian University of Athens. Her main fields of specialization are company law, public and private banking and capital markets law, as well as consumer protection law. She is the author of several books and articles in the abovementioned fields. Christina Livada is working for the last fifteen years at the Hellenic Bank Association as a Special Legal Advisor (currently on a part-time basis), responsible for the regulatory issues pertaining to banking, capital markets and consumer protection law. She is a member of the corporate governance Working Group of the Hellenic Corporate Governance Council for the review of the Greek Corporate Governance Code. She is also member of the Hellenic Association of Banking and Capital Markets Law and responsible for the content of the scientific Review Financial Law. She obtained her PhD from the Faculty of Law of the National and Kapodistrian University of Athens in 2004.

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