From cryptocurrencies to increased interest in diversity at executive levels, technology and market forces mean Canada's risk and compliance professionals must stay alert and be proactive.
After several years of hard-to-grapple-with changes, Canadian risk and compliance professionals are probably hoping for a slower pace of regulatory change in the coming years.
“Firms’ capacity and ability to change is being stretched just a bit,” said Senior Regulatory Intelligence Expert Susannah Hammond. “There’d been some hope life might calm down, but that doesn’t appear to be happening.”
Rather, a host of new challenges – many of which arise from technological change and market forces, rather than legislative reforms – are demanding Canadian risk and compliance professionals stay alert and responsive.
During the March 22 “Top 10 Regulatory Insights for Canadian Risk and Compliance Professionals” webinar, Hammond and Regulatory Intelligence Expert Helen Chan outlined the topics they see as being critical priorities for 2017. They included:
Anti-money laundering compliance risks
Anti-money laundering initiatives are expected to intensify worldwide and Canada is no outlier.
“What we really encourage firms to do here is be proactive and pre-emptive,” Chan said. “It’s a lot easier to address something head-on than it is to run after it and try to pick up the pieces.”
Hammond espoused training and education throughout an organization to shape behavior appropriately and comprehensively.
The idea that security breaches happen and there isn’t anything that can be done about them no longer holds water. Quite the opposite – today, firms must anticipate an imaginative spectrum of threats and need to have tried-and-tested cyber defense measures.
Firms should expect intensifying regulatory scrutiny over cybersecurity practices, and senior managers and cybersecurity experts should be prepared to explain how their strategic approach can protect their organization against a cyberattack or data breach, Hammond said.
Developments in cryptocurrency
Cryptocurrencies are a “mixed picture internationally,” according to Hammond.
There was a period of time where cryptocurrencies weren’t a top issue for regulatory agencies, but that era is coming to an end.
“Before a firm goes anywhere near a cryptocurrency, you really need to have the skills in-house to assess the fundamentals of the cryptocurrency itself,” Hammond said. “It’s pretty serious stuff. You do need to have senior managers, risk & compliance and legal folks all aware of the risks of cryptocurrency. I really would not underestimate the resources required to properly list a cryptocurrency. That’s not to say it’s impossible, but it’s very likely to be quite a lot of heavy lifting.”
Improving gender diversity policies
More and more, the professional world is coming to understand that diversity in the workplace is good for business. 2017 marked the third year since Canadian regulators introduced a voluntary “comply or explain” disclosure regime obligating listed companies in Canada to disclose, on an annual basis, information regarding women in board and executive officer positions as well gender diversity policies. While more and more listed companies have voluntarily disclosed diversity information since the regime was introduced, Canadian firms have overall been slow to move the needle on gender diversity. Hammond noted that investors might start pushing for a firmer regulatory touch going forward.
Listen to the on-demand version of the Top 10 Regulatory Insights for Canadian Risk and Compliance Professionals webinar and explore more of what Thomson Reuters Regulatory Intelligence has to offer.
Follow the conversation with our earlier posts UK, EU compliance priorities for 2018: Skill and agility in face of uncertainty and Technology’s mixed blessing for compliance: Separating reward from risk.