Compliance in Finance Overview

Basic understanding of financial principles like saving, investing, and lending.

Comprehensive financial knowledge including strategic use/analysis of financial info, building upon financial literacy.

Adhering to financial regulations & ethical rules to protect the financial system and clients.

Protecting consumers/investors, maintaining market integrity, & reducing financial risk.

Government agencies that create and enforce financial regulations.

Regulates security markets to protect investors.

Manages monetary policy & supervises banks.

Oversees brokerage firms to protect investors.

Important laws passed to regulate financial activities.

Law passed to prevent financial crises by improving transparency & restricting excessive risk-taking.

Requires financial institutions to combat money laundering.

Provides guidance for financial institutions related to combating terrorism.

Actions to prevent money laundering and financial crimes.

Reports filed with regulators about suspicious activities that might relate to money laundering or fraud.

Verifying customer identities to prevent fraud & financial crimes.

Following regulations and laws for financial activities, from investments to banking.

US central bank, manages monetary policy (like interest rates and inflation).

US regulatory agency for securities markets, ensuring transparency.

Insures bank deposits to protect public trust in the US financial system.

Investment advisors must verify client identity and risk tolerance to prevent fraud and money laundering.

Making illegally obtained money seem legitimate through complex transactions.

US agency that monitors for money laundering by analyzing financial transactions.

A more thorough monitoring process for high-risk clients, countries, or transactions.

Rules to protect personal data, like GDPR in Europe and CCPA in the US.

Strong methods like encryption, limited access, and regular checks to protect data.

Potential problems like fraud, cyber threats, and market manipulation that must be managed.

Prioritizing monitoring efforts based on the level of identified risk.

Trading stocks based on non-public information, giving an unfair advantage.

Actions that manipulate market prices, like spreading false rumors or creating artificial price hikes.

A set of rules defining acceptable behavior within a financial institution.

Regular checks by the company's own compliance team to ensure policies are followed.

Independent reviews by external parties, ensuring compliance with industry standards.

Following restrictions on financial transactions with sanctioned entities.

Actions by a central bank to adjust money supply and credit to affect economic activity, aiming for price stability and full employment.

Government use of taxation and spending to influence the economy.

Central bank adjustments to borrowing costs for banks, affecting consumer/business lending.

Regulations on the amount of money banks must keep in reserve against deposits.

Buying/selling government securities by a central bank to influence money supply

Central bank purchasing of assets (e.g., bonds) to boost the money supply.

Government expenditures on public goods to influence economic activity.

Government revenue collected influencing income and savings

General rise in prices for goods and services.

Increase in the production of goods and services in an economy.

Number of people actively working in an economy.

Total amount of goods and services consumers, businesses, and government want to buy.

Total amount of outstanding debt of a government

Government actions to encourage investment in specific industries to boost economic growth

How fiscal policies (government spending and taxing) affect the spread of income among people.

How monetary policy (interest rates) and fiscal policy (spending/taxing) affect each other, positively or negatively.

When monetary and fiscal policies work together in a way that supports economic goals.

When monetary and fiscal policies work against each other and make the economy less stable.

The success of a policy depends on the current economic climate, inflation levels, and existing debt.

A country's economic policies are affected by global economic situations.

Countries used lower interest rates and increased government spending to revive their economies after the 2008 recession.

European countries responded to debt issues with strict fiscal policies (spending cuts) and potentially monetary adjustments, like managing exchange rates.

There's often a delay between implementing a policy and seeing its full effect.

Political considerations limit the choices and effectiveness of economic policies.

Domestic policies are intertwined with international actions and global events.

Systematic review of processes, systems, and performance to ensure effectiveness, efficiency, and regulatory compliance.

Evaluations of internal controls, processes, and systems performed by the organization's own team.

Independent reviews of financial statements and other documents by external parties, ensuring compliance with standards and regulations.

Ongoing activities to ensure adherence to laws, regulations, and policies, preventing violations.

Policies & procedures, designed to provide reasonable assurance regarding the reliability of financial reporting, efficiency, and effectiveness of operations, and safeguarding assets against loss or misappropriation.

Preparation and disclosure of financial information to stakeholders, like investors or creditors.

Rules established by recognized bodies (e.g., GAAP) for preparing financial statements.

Adhering to all applicable local, state, and federal laws and regulations.

A structured way to find, analyze, and evaluate potential risks that an organization might face, such as financial, operational, or reputational losses.

The probability of a risk happening; how likely it is to occur.

The potential negative consequence if a risk does occur.

Actions developed to address and mitigate identified risks.

Measuring organizational success against goals using KPIs (Key Performance Indicators).

Specific metrics used to track and measure organizational performance.

How effectively an organization uses its resources.

The financial stability of the organization.

The achievement of long-term organisational goals.

Following international and national regulations to avoid financial transactions with restricted individuals or entities.

Thoroughly investigating potential business partners to ensure they aren't involved in sanctioned activities or entities.

Identifying and managing potential sanctions risks related to partners, transactions, and jurisdictions.

International and national rules outlining sanctions and screening requirements for various entities and activities.

Government actions, like penalties or legal proceedings, to ensure compliance with sanctions and screening regulations.