module specification

The module examines the theoretical and applied aspects of regulation and compliance in the financial services industry. Relevant theories, models and empirical evidence are used in the analysis of regulatory and compliance issues across the globe.

This module is aimed to present a set of principles that enable students to understand better the scope of substantive regulation and compliance from local and global perspectives. This module provides the opportunity to students for assessing regulatory choices on specific policy issues and encourages critical reflection on the design of regulation. Students also have the chance to study the forces which have shaped financial regulation and to probe the purpose and nature of financial regulation. As regulation increases and changes are ongoing, the demand for clear guidance on navigating daily compliance issues is greater than ever. Students have opportunities to discuss regulatory concepts and their practical applications including the latest compliance strategies and regulatory information.

This module aims to develop:

1. awareness and understanding of theory and practice of the role of the financial regulation and compliance in the financial services industry.
2. a reflective approach to the analysis of issues relating to prudential regulation, conduct of business, compliance functions, customer due diligence and dispute resolution.
3. problem-solving skills for addressing regulatory and compliance challenges of surveillance and combating of money laundering, terrorism, corruption, insider dealing, and other forms of financial crime at a local and global level.

Note: If there are not sufficient student numbers to make a module viable, the School reserves the right to cancel such a module. If the School cancels a module it will use its reasonable endeavours to provide a suitable alternative.

N/A

The rationale for financial regulation and its limitations (LO1)

The typology of regulation: systemic, prudential and conduct of business (LO1)

The compliance function and the compliance principles: independence and conflicts of interest; resources and responsibilities; internal audit; cross border issues (LO1)

The regulatory scope and the key compliance activities (LO1)

The organization of regulatory authorities in various regions around the globe (LO1)

The role of central banks; International bodies; Basel standards and accords on banking regulation (LO2)

Regulatory processes: supervision, controlled functions, customer due diligence (LO2)

Prevention of financial crime: anti-money laundering; combating terrorist financing, corruption, insider dealing (LO2; LO3)

Current issues, developments, research and empirical evidence in relation to financial regulation and compliance (LO2; LO3)

This module will explore the theoretical and practical aspects of financial regulation and compliance and provide a supportive learning environment to students for developing generic academic and employability skills. The module is very relevant to future career opportunities in financial services and financial services regulatory organisations in supervisory, audit and compliance capacities. Delivery will be based on a mix of lectures and seminar activities.  The lectures will deliver the core academic and theoretical content.  These will be supported by the seminar classes which will use case study and other approaches to develop student knowledge understanding.  

There will be 2 hours lecture each week supported by directed reading and other media such as videos. Interactive teaching approaches will be adopted, and students will be encouraged to participate in small group exercises during the class. Student contributions within lectures will be encouraged. The attention of students will be invited to the one-to-one advice and guidance sessions and careers workshops and events offered by the University’s Careers team who will also be invited to a lecture session in order to offer students a brief overview of career opportunities and strategies.

There will be a 1-hour seminar that will utilise a variety of teaching tools including group activities, presentations and discussion.  Group quizzes will provide a rigorous setting for providing a thorough knowledge of specific regulatory and compliance provisions.  Websites will be explored for IT solutions that support the regulatory and compliance functions.  Students will be required to prepare materials for the seminars based on the lecture themes of the previous weeks.  The seminars will develop student confidence in the subject discipline and generic skills such as oral communication, analytical skills and memorisation with understanding. 

Students will be expected to devote at least twelve or more hours per week undertaking independent reading and study. The University’s virtual learning platform will be used to provide supporting class materials, cited web sources, discussion forums and guidance for independent learning. Reflection and critical thinking skills will be practiced through periodic reflective exercises.

On successful completion of the module, students will be able to:

1. demonstrate conceptual understanding that enables the critical evaluation of the rationale, types and limitations of financial regulation.
2. demonstrate originality in the analysis and evaluation of the regulatory environment in which domestic and international financial institutions operate, the critical issues in regulatory compliance, and the role of regulators and compliance professionals in the financial services industry.
3. develop knowledge and understanding of national and international bodies involved in regulation and compliance, and problem-solving skills in regulatory and compliance matters in the financial services industry.

Diagnostic and formative assessment will take place on a weekly basis in seminars to develop theoretical, analytical and oral and written communication skills.

Formative assessment will take place in week 9. Summative assessment will take place in weeks 13-15 with a 3-hour unseen written examination which will test student’s knowledge and understanding of the module content and assess written communication.  Students will be required to use theoretical perspectives, models and empirical research evidence to gain insights into financial regulation and compliance.  This assessment will test the ability to apply theoretical principles to real-life case studies, evaluate students’ knowledge and understanding of the themes developed in the module and will assess research, reflection, criticality and written communication skills.

Reading List Talis Link:

https://bblearn.londonmet.ac.uk/webapps/blackboard/content/launchLink.jsp?course_id=_43271_1&tool_id=_2924_1&tool_type=TOOL&mode=cpview&mode=reset

Core Reading List:

Armour, J. (2016) Principles of Financial Regulation. Oxford University Press.

Alexander, K. (2019). Principles of Banking Regulation. Cambridge University Press.

Dragomir, L. (2012) European Prudential Banking Regulation and Supervision: The Legal Dimension Routledge / Taylor and Francis.

Dill, A. (2019). Bank Regulation, Risk Management, and Compliance: Theory, Practice, and Key Problem Areas. United Kingdom: Taylor & Francis.

Mills, A. and Haines, P. (2015) ‘Essential Strategies for Financial Services Compliance’ 2nd Ed, John Wiley and Sons, Chichester

Other Reading List:

Basel Committee on Banking Supervision (2005) ‘Compliance and compliance function in banks’, Bank for International Settlements, available at http://www.bis.org/publ/bcbs113.pdf [accessed on 30/03/2021].

Buckley, A. (2011) ‘Financial Crisis: Causes, Context and Consequences’ Pearson Education, Harlowe.

Chapelle, A. (2019). Operational Risk Management: Best Practices in the Financial Services Industry. Wiley.

Davies, H. and Green, D. (2013) ‘Global Financial Regulation: The Essential Guide’. John Wiley and Sons.

FCA (2021) Financial Conduct Authority Handbook, available at https://www.handbook.fca.org.uk/handbook [accessed on 30/03/2021].

Kotz, H. D. (2015) Financial Regulation and Compliance: How to Manage Competing and Overlapping Regulatory Oversight. John Wiley & Sons.

Kovas, A. (2015). Understanding the Financial Conduct Authority: A Guide for Senior Managers. Troubador Publishing Limited.

Molony, N., Ferran, E and Payne, J. (Eds) (2017) The Oxford Handbook of Financial Regulation. Oxford University Press.

PRA Rulebook (2021) Prudential Regulation Authority Rulebook, available at http://www.prarulebook.co.uk/rulebook/Home/Rulebook/ [accessed on 30/03/2021].

Academic Journal Articles (accessible electronically)

Barakat, A. and Hussainey K. (2013) ‘Bank governance, regulation, supervision, and risk reporting: Evidence from operational risk disclosures in European banks’ International Review of Financial Analysis, Volume 30, December 2013, Pages 254-273.

Detragiache, E. and Demirgüç-Kunt, A. (2010) ‘Basel Core Principles and Bank Risk: Does Compliance Matter?’ International Monetary Fund Working Paper (EPub).

Irwin, A. S. M., Slay, J., Choo, K-K. R. and Lui, L. (2014) ‘Money laundering and terrorism financing in virtual environments: a feasibility study’, Journal of Money Laundering Control, Vol. 17 Iss: 1, pp. 50 -75.

Mugarura, N. (2014) ‘Customer due diligence (CDD) mandate and the propensity of its application as a global AML paradigm’, Journal of Money Laundering Control, Vol. 17 Iss: 1, pp.76 – 95.

Prorokowski, L. and Prorokowski, H. (2014) ‘Organisation of compliance across financial institutions’ Journal of Investment Compliance, Volume: 15 Issue: 1, 2014.

Tirole, J. (2014) ‘Market Power and Regulation’ Royal Swedish Academy of the Sciences 13 October 2014 [Nobel prize winner].

Whisker, J., and Lokanan, M. E. (2019) ‘Anti-money laundering and counter-terrorist financing threats posed by mobile Money’, Journal of Money Laundering Control, https://doi.org/10.1108/JMLC-10-2017-0061.