Hire a regulatory relationship manager

If you are not a big bank. You are unlikely to be able to afford a compliance office with experience at a regulator. The next best thing to do is not to hire a law firm with that experience. The next best to do is to hire someone to be a regulatory relationship manager.

The main reason to hire a relationship manager rather than an outside firm is because if something comes up, you want to be able to have a quick, immediate and candid contact with your regulator. Regulators are people. Even as an institution, it is made up of people. While all regulators have a way of prosecuting bad behavior, mistakes are not things they want to punish banks for. They don’t want to take down a bank. They want to keeps banks in compliance with the law, rules and regulations.

As people, regulators are less likely to look at big banks favorably because they see that big banks have the resources to implement changes required for compliance. Inversely, they are sympathetic to the smaller banks for the reverse reason. Big banks are indeed putting incredible effort to stay in compliance. But just look at their market clout and the profits they generate, regulators find it difficult to believe that more cannot be accomplished. Small banks are not failing at any great rate. Still, they lack diversity of products, services, clients and geographic reach to weather waves the big banks consider to be just a little splash in the bathtub.

Considering the help regulators like to provide smaller institutions, having a person who is dedicated to staying constant contact to keep the regulator abreast of the effort being made and the resources allocated to compliance helps a lot.

The reason not to outsource this function is simple: anyone facing the public is an ambassador to the firm. The US does not outsource diplomacy to Germany. Why should your bank outsource such an important face of the firm.

For that matter, a relationship manger need not be the most experiences but having experience is crucial to success. Just having someone with a decade of experience or more helps to give the impression that the relationship is important to them.

Will FATCA compliance strengthen the financial sector?

About the Author: M. C. Maltempo is a compliance professional with more than a decade of experience helping banks, law firms and clients manage investigations and regulatory responses. 

Alibaba is being kicked out of Taiwan

Jack Ma, Founder & CEO, Alibaba Group

Alibaba, the Chinese AmazoneBayPaypalDHL all-in-one, has been ordered to leave the Taiwanese market by Taiwanese regulators. It ran afoul of a law that required all mainland Chinese companies to go through a special registration in Taiwan to do business there. The Taiwanese subsidiary was registered as a fully controlled entity of Alibaba’s Singaporean subsidiary. The Singaporean subsidiary is a wholly controlled by the Mainland company, making the Taiwanese subsidiary a Singaporean company in name only.

Regulators discovered that Alibaba had not passed the registration process required of Mainland companies when reviewing Alibaba’s filings with the SEC in the United States. Alibaba filed papers with the SEC to publicly trade its equity shares in the US markets.

The purpose of the law is to prevent the Communist Party from taking a hold on the island.

Founder and CEO of Alibaba is the every so charismatic Jack Ma.

Taiwan’s official name is Republic of China, not to be confused with Mainland’s official name, People’s Republic of China. The Taiwanese government was formed when the Communist Party kicked out the party from the Mainland. In the early days after the communist revolution, most western powers recognized the Taiwanese government to be the legitimate government of China. Unofficially, US President Richard Nixon recognized the Communist Party as the ruling party. And officially, US President Jimmy Carter recognized the Communist Party as the ruling party. Since the turn of the century, Republic of China has been on a campaign to consider itself an independent nation, seeking a seat of its own in the United Nations and developing diplomatic relationships across the globe. Also, it has supported a grassroots campaign in the United States to have US citizens and permanent residents of Taiwanese decent to identify themselves as “Taiwanese,” rather than Chinese, in public and on the census.

About the Author: Marcus Maltempo is a compliance professional with more than a decade of experience helping banks, law firms and clients manage investigations and regulatory responses.