The AIM-listed, cross border financial group has been told to address seven compliance “priorities” and 21 “recommendations” following a special investigation led by Deloitte and agreed with the island’s financial regulator.
The “skilled person report” into STM’s Gibraltar-regulated companies was agreed with the Gibraltar Financial Services Commission after it suspected failings in oversight, conflicts of interest and client take on and monitoring.
The seven priorities are “required to ensure that the businesses comply with the relevant Gibraltarian legislation and best practice” STM told the London stock exchange this morning.
The report identified the following measures STM would need to take –
- Introduce a more embedded risk framework with better defined risk appetite statements
- Appoint additional non-executive directors to the subsidiary boards.
- Appoint a internal auditor at its life assurance company
- Strengthen its Gibraltar compliance plan
- Carry out a rolling review of intermediaries and clients with first line and second lines of defence
- Build a more robust framework for identifying and recording how potential conflicts of interest across the businesses are dealt with
The report said a number of steps had already been taken including the appointment of an internal audit function in the life assurance business and a group head of enterprise risk management in March 2017.
The next steps in the compliance saga involve STM and the GFSC agreeing an action plan.
While giving no timetable for the action plan, STM said the companies would “engage” to “make the Group’s businesses more robust and… continue the improvement of the processes and systems that they use to conduct their activities in line with the requirements of the GFSC”.
