UK regulator rejects experienced compliance officer for ‘competence concerns’
Friday, August 25, 2017 at 8:28AM
Richard L. Cassin in Financial Conduct Authority, United Kingdom

The Financial Conduct Authority refused to approve a compliance officer for an online trader despite almost 20 years of prior experience.

Rupert Nathan worked for Goldenway Global Investments. The firm's main business is selling foreign exchange and commodity products to retail clients.

He applied to the FCA for approval to perform compliance oversight and money laundering reporting officer roles.

In a final notice (pdf) dated August 21, the FCA said:

Mr Nathan failed to demonstrate a detailed knowledge and understanding of the implications of the Firm’s operating model, the money laundering and financial crime risks faced by the Firm and the processes that need to be put in place at the Firm satisfactorily to address those risks. Specifically, it was Mr Nathan’s failure to satisfy the Authority that he could proactively identify and manage the relevant risks in performing the Refused Controlled Functions which caused the Authority to have concerns about Mr Nathan’s competence and capability to perform the Refused Controlled Functions.

The FCA also said Nathan didn't convey "an adequate understanding of the difficulties in assessing the appropriateness of transactions for customers inherent in the Firm’s business model . . . "

Nathan started his career in Australia at a stockbroking firm before relocating to London in 1999, the FCA said.

From 2010 to 2013, he was the chief operating officer and head of compliance at a wealth management firm called Mint Financial.

He also worked at Beaufort Securities.

According to his application, he performed compliance oversight and money laundering checks in prior positions.

During an interview with the FCA, Nathan characterized Goldenway Global's business model as “very, very simple.” But the FCA said Nathan "failed to recognize the complex nature of the  . . . products offered" by the firm.

The FCA also said Nathan didn't understand how Goldenway Global's third-party provider confirmed the authenticity of Chinese National Identity Cards, a key step in the client on-boarding process.

The FCA said,

This meant that Mr Nathan was unable to appreciate the limitations of the system and he appeared not to have anticipated the concerns about the consequence of this lack of knowledge and the other issues and risks that need to be addressed in verifying clients based in China.

He started working for Goldenway Global in July 2016.

"Following the issue of the notice, Nathan is no longer employed by the firm, which has withdrawn its support for the application," Weatlth Manager reported.

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Richard L. Cassin is the publisher and editor of the FCPA Blog.

Article originally appeared on The FCPA Blog (http://www.fcpablog.com/).
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