Compliance / Legal Advisory Services

Written by Michael McAlary

Services Area: Risk and Strategy

Industry Sector: Financial Services - Compliance

Situation/Responsibility

Chairmont was engaged by an Australian Stock Exchange (ASX) listed funds management company to oversee and drive a legislative compliance program.  The Australian Financial Services License (AFSL) licensing conditions and conduct obligations for trustees meant changes to our client’s business model to ensure compliance. Failure to implement new licensing conditions and business model changes would severely impact the client’s ability to provide Traditional Trustee Company Services (TTCS), i.e. to “stay in business”. This was a flagship service of the client.

The National Licensing of Trustee Companies (NLTC) Program was established and its objectives were to:

  • Obtain the required variation approval of the existing AFSL;
  • Design, develop and implement the necessary changes to the client’s products, marketing material, documents, policies & processes and systems to ensure compliance with AFSL conditions and conduct obligations; and
  • Where possible bring about revenue model and business process improvements and efficiency changes.

Risk/Challenges

A number of program constraints were encountered; namely:

  • Time. The mandatory start date meant that any project slippage could not be tolerated unless suitable contingency plans were available;
  • Resource Contention. There was resource contention for Subject Matter Experts (SMEs) working on business as usual activities and other priority initiatives; and
  • Funding and change capacity. There were funding and change capacity constraints meaning that ‘best of class’ solutions although considered could not be immediately implemented.

Achievements

Chairmont worked with the client to achieve the goals of the NLTC Program as follows:

  • Obtained the required AFSL(s);
  • Ensured compliance with the AFSL conditions and conduct obligations; and
  • Safeguarded the “best in class” title for the provision of traditional trustee services while recognising that the benchmark for this is being established through minimum licensing requirements.

Chairmont implemented the NLTC Program deliverables on time, within scope and budget.