Regulatory reporting is a vital part of ensuring compliance in both the private and public sectors. While it can come in many forms, you’d be hard pressed to find a role in which you wouldn’t be subject to some form of regulatory reporting.
Depending on the type of reporting, it can be managed either internally or externally by regulatory bodies. There are even complex software applications that can produce automated, multi-jurisdictional regulatory reports.
To protect yourself and your business you need to know how regulatory reporting affects you.
Before you read on and get demoralised, remember this; you are probably already doing quite a lot of regulatory reporting.
Who and what is regulated?
The short answer is YOU. Whatever your role, or capacity you will be answerable to someone. It could be your line manager, it could be HMRC. It could be ascertaining whether you have the correct training to use your equipment, it could be scrutinising your end-of-year accounts. It could even be about getting ready to prove that you aren’t open to being bribed. Broadly speaking, regulatory reporting exists in order to assure that organisations are run safely, efficiently and ethically.
On a practical level, this boils down to record keeping. Mistakes happen and when they do it is incumbent on any business in a regulated industry to prove that they have a chain of accountability and can track where errors crop up.
That’s why marketing departments have strict version control on their drafts. If an unapproved piece of copy makes it out into the wild, the FCA are going to be quite keen to know where the leak was.
Who does the regulating?
While some regulatory reporting may be internal, this will in most cases be subject to review by a regulatory body. Most industries have their own impartial regulatory body. The finance industry has the FCA, the communications industry has Ofcom, advertising has the ITC and energy has Ofgem.
These guys don’t mind spot-checking either. And when they do, don’t just think they’ll be looking at what you’re doing today. They may very well want to see a bit of a back story. They’re suckers for a back story. They’re like X-Factor judges in that regard.
Why is this important?
The importance of an impartial, external and transparent regulatory body is obvious when compared to the alternative. However well-meaning and painstakingly performed, internal regulatory reporting can be open to corruption, falsification or error. Furthermore, reporting to an external regulatory body guarantees a certain standard of conduct. This improves customer trust.
Types of regulatory reporting
Despite the amorphous nature of regulatory reporting, depending on the nature, size and scale of the business, here are some of the more common forms that you may face.
- Record keeping- One of the simplest and most vital forms of regulatory reporting. Keeping detailed, accessible and accurate records of your transactions are an essential part of regulating your business. Keeping records of process adherence too. This may mean sending a project manager to the legal department with a pile of forms whenever anyone deviates from protocol, but it’s worth it.
- Complaint handling- It is prudent for any business to have an official procedure in place to handle complaints in a fair and productive way. Once established this must be adhered to and subject to regulation.
- Processes and procedures- As diverse and complex as these may be, every time you adhere to a set of defined guidelines, every time you sign off on a piece of paperwork, every time you explain “terms and conditions” to a customer, it’s a form of regulatory reporting.
- Training- Formalised on-the job training, CPD, performance reviews and appraisals. You guessed it! They’re all regulatory reporting too!
Why does this matter?
- Legal protection- In today’s litigious society, these forms of regulatory reporting demonstrate your diligence and protect you from the threat legal claims against you… Provided they’re adhered to, of course.
- Improved customer trust- Customers are likely to invest their confidence in a provider that can be seen to be adhering to regulation. This assures them that they are getting a reliable and proven service.
- Peace of mind- As much as it can sometimes feel like you’re jumping through a series of hoops (hoops that are on fire!), it is reassuring to know that your business is regulated and compliant.