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 aims to develop:

1. awareness and understanding of the theory and practice of the role of regulation and compliance in the financial services industry.
2. a reflective approach to the analysis of issues relating prudential regulation, conduct of business, compliance functions, customer due diligence and dispute resolution.
3. academic skills including academic reading and writing, memorisation with understanding, analysis, critical thinking and research
4. preparedness for the intellectual and analytical challenges of surveillance and combating of money laundering, terrorism, corruption, insider dealing, and other forms of financial crime at a local and global level

Theoretical and applied aspects of the role of regulation and compliance in the financial services industry. L.O 1

Rationale for financial regulation; the role of central banks; limitations of regulation.L.O 1

Types of regulation: systemic, prudential and conduct of business.
Organization of regulatory authorities in various regions around the globe; international bodies; Basel standards and accords on banking regulation. L.O 1, 2

Compliance principles: independence and conflicts of interest; resources and responsibilities; internal audit; cross border issues.L.O 2, 3

Regulatory processes: supervision, controlled functions, customer due diligence checks. L.O 2, 3

Anti-money laundering controls; combating terrorist financing, corruption, insider dealing; prevention of financial crime.L.O 2, 3

Current issues, developments, research and empirical evidence in relation to financial regulation and compliance. L.O 2, 3

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.

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 1.5 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.

The will be a 1.5 hours 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. 

At least two seminars will be held in the Bloomberg room involving basic training in the use of Bloomberg for developing insights into the operations of financial institutions that are subject to regulatory oversight.   

Students will be expected to devote at least ten 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.

The module is very relevant to future career opportunities in financial services and financial services regulatory organisations in supervisory, audit and compliance capacities.

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. Continue to advance their knowledge and understanding of national and international bodies involved in regulation and compliance, and of regulation and compliance matters.

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

Formative and summative assessment will take place with the submission in week 9 of coursework in the form of a report of 2500 words. 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.

Summative assessment will take place in weeks 14-15 with a 2-hour unseen written examination which will test student’s knowledge and understanding of the module content and assess written communication.

Core Texts:
Armour, J. (2016) Principles of Financial Regulation Oxford University Press.
Basel Committee on Banking Supervision (2005) ‘Compliance and compliance function in banks’, Bank for International Settlements at http://www.bis.org/publ/bcbs113.pdf.
Dragomir, L. (2012) European Prudential Banking Regulation and Supervision: The Legal Dimension Routledge / Taylor and Francis.
Mills, A. and Haines, P. (2015) ‘Essential Strategies for Financial Services Compliance’ 2nd Ed, John Wiley and Sons, Chichester. 
             
Other Texts:
Buckley, A. (2011) ‘Financial Crisis: Causes, Context and Consequences’ Pearson Education, Harlowe.
Davies, H. and Green, D. (2013) ‘Global Financial Regulation: The Essential Guide’ John Wiley and Sons.
FCA Handbook (2019) at https://www.handbook.fca.org.uk/handbook.   
Joint Money Laundering Steering Group (2011) ‘Prevention of money laundering/combating terrorist financing’ Part III at www.jmlsg.org.uk/download/7323.
Kotz, H. D. (2015) Financial Regulation and Compliance: How to Manage Competing and Overlapping Regulatory Oversight John Wiley & Sons.
Molony, N., Ferran, E and Payne, J. (Eds) (2017) The Oxford Handbook of Financial Regulation Oxford University Press.
PRA Rulebook (2019) at http://www.prarulebook.co.uk/rulebook/Home/Rulebook/04-03-2019. 

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.

Professional Journal Articles
Fuller, J. (2019) ‘The stamp of authority’, Financial World, February/March 2019 pp8-9.

Websites [Browse websites of global financial institutions and regulators]
www.bankofengland.co.uk/pra
https://www.bis.org/regauth.htm
www.fca.org.uk