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A major Jersey finance firm has been slapped with a £381,000 fine after a report uncovered “issues” in relation to conflicts of interest, compliance and staff training on money laundering and record-keeping.
The Jersey Financial Services Commission (JFSC) announced its decision to fine IFC-based Sanne this morning, stating that its actions “support its objectives of enhancing the reputation and integrity of Jersey in commercial and financial matters.”
In a statement, the JFSC explained that Sanne had breached Principle 3 of the Fund Services Business and Code of Practice for Trust Company Business, which stipulates that an organisation “must organise and control its affairs effectively for the proper performance of its business activities."
Sanne is now said to have resolved the issues raised by the JFSC.
Outlining the background to the breach, the JFSC said that “a number of material issues in need of remediation” at Sanne were first flagged up following reviews in 2014 and 2015.
Pictured: Sanne were fined £381,010 in total.
Sanne then presented a plan to rectify these problems to the JFSC, which they said had been completed by March 2017.
However, a report published in July of that year following an internal audit by Sanne “identified a number of issues that the JFSC considered material in relation to conflicts of interest, compliance monitoring and planning, timely risk escalation, and staff training particularly in relation to anti money laundering, greater awareness of risk and the importance of record keeping.”
In September 2017, further reports issued by Sanne’s compliance team to the board of directors “corroborated” this information, additionally identifying that their department had been “under resourced.”
The board of directors then instigated their own “thorough” review, and similarly found areas in need of improvement.
JFSC officials then conducted their own “regulatory investigation”, which backed Sanne’s findings.
Pictured: Martin Moloney, JFSC Director General.
However, these problems were quickly rectified, with the JFSC noting Sanne’s prompt approach to the matter as a key “mitigating factor.”
“Upon discovery [Sanne Fiduciary Services Limited] promptly, and voluntarily, informed the JFSC of its failure to fully implement the 2015 plan and engaged co-operatively with the JFSC in a constructive and positive way, acknowledging the issue from the outset and securing necessary resources to undertake a comprehensive assessment of its entire business,” JFSC said in its statement.
The firm were also said to have secured the services of “third party subject matter experts, including a regulatory consulting firm” to help them address their shortcomings, while Sanne’s board was said to have put “significant investment” into “develop[ing] and strengthen[ing] the control environment.”
A programme is also now in place to give staff training on their regulatory and anti-money laundering responsibilities.
Handing down their fine of £381,010 under the Financial Services (Financial Penalties) Order, JFSC made a number of recommendations to the JFSC and wider industry to ensure:
Martin Moloney, JFSC Director General, commented: “The penalty would have been significantly greater had it not been for the work of SFSL’s current compliance function, highlighting areas for improvement, and the proactive approach of SFSL’s Board and senior management team in promptly acknowledging the shortcomings and making the necessary changes to the business.”
Sanne declined to comment further.
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