Home' Trinidad and Tobago Guardian : July 27th 2017 Contents JULY 27 • 2017 guardian.co.tt BUSINESS GUARDIAN
VERBATIM | BG9
The regulatory landscape that
businesses need to comply
with has increased signifi-
cantly over the past few years
and now include Anti-Mon-
nancing of Terrorism (AML/CFT), FATCA and
the recently enacted Tax Information Exchange
In addition, there are several upcoming
amendments that impose compliance re-
quirements eg public procurement, credit
union and insurance legislations. The cost
of doing business has increased due to reg-
ulatory compliance and this is especially the
case for small and medium-sized enterprises
(SMEs) that constitute the majority of busi-
nesses in T&T.
Many of these SMEs may have the following
• Why is this applicable to me?
• Why the unnecessary burden on our al-
ready stretched resources?
• What is the point of all of these require-
ments? The regulators do not understand our
• What is the outcome of all of this? The
costs of compliance outweighs the benefits.
KPMG, who has been providing regulatory
consultancy and compliance services to clients
for over two decades, provides some guidance
on questions SMEs posed regarding their reg-
Q: It's unfair for SMEs to be subjected to
the same requirements as larger organisa-
tions. Is this going to change and what can
be done to inform the regulators?
Unfortunately many pieces of legislation
seem to have a one-size-fits-all approach.
It is apparent that some legislation imposes
requirements that can only be met by larger
organisations with the capacity, governance
structure and resources necessary to facilitate
This could have the unintentional conse-
quence of squeezing out SMEs from the mar-
ket, impacting negatively on unemployment
and competition; stifling entrepreneurship
and economic growth. This homogeneous
approach should be re-examined to ensure
that SMEs remain viable and that requirements
are tailored to address their needs whilst also
ensuring that the objectives of regulations are
There are several working groups that mon-
itor the regulatory landscape and present the
concerns and challenges companies experience
at regulatory forums.
The need for a tailored approach to regula-
tions is being discussed, however, SMEs and
their representative bodies also need to make
representation to the regulators so that their
views and opinions are factored into legislation
particularly at the consultation stage.
Q: What are the regulators doing to in-
crease awareness of requirements by the
general public as well as businesses?
One challenge faced by many businesses in
trying to enforce legislative requirements that
impact their customers, is the lack of aware-
ness of these requirements by the public. This
results in increased reluctance and difficulties
in obtaining requirements from customers.
The regulators are conducting awareness
sessions particularly with regard to AML/
However, these sessions both targeted to
businesses and the public may need to be
increased in order to facilitate better under-
standing of requirements.
Q: What are the benefits of all these re-
We have heard from numerous clients that
they do not see the benefits of complying with
the sometimes very onerous requirements and
that they would need to incur significant costs
to be compliant.
Legislation is designed to safeguard the
interests of all stakeholders, promote ethical
behaviour and also facilitate the identification
of recalcitrant persons and organisations. If
legislative enforcement and implementation
functioned as designed, then consumer con-
fidence should be boosted knowing that their
business relations are well monitored and free
from corrupt practices.
Also, it facilitates opportunities for organisa-
tions to make better use of technology in being
able to capture consumer data and real-time
analysis of transactions.
Conversely, regulators need to do a better
job in communicating the results and ben-
efits from enforcing requirements so that
businesses can appreciate the value of com-
pliance, lobby for more resources and facilitate
greater compliance efforts as the importance
of their activities will be heightened and not
simply seen as an administrative burden. It
will also attract more skilled resources into
the compliance function as the importance of
the role will be elevated and the general public
will also be more willing to satisfy regulatory
Q: Why should I comply when it appears
that entities that do not comply with re-
quirements do not seem to be affected?
Many of our clients who have been com-
plying with legislative requirements have
indicated that it puts them at a competitive
disadvantage as customers who do not want
to provide the requirements simply go to
another institution that do not ask for such
From their perspective, it appears that they
actually lose business to non-compliant or-
ganisations who do not seem to be penalised
by the regulators.
Enforcement of legislative requirements by
the regulators must be seen to be taking place
particularly in instances where business or-
ganisations fail to comply. If non-compliant
organisations are not penalised then this may
create a perception that there are no conse-
quences for non-compliance, would make
compliance efforts more difficult and diminish
the effectiveness of legislation.
In order for the regulatory system to func-
tion effectively, non-compliant organisations
should be given an opportunity to address their
deficiencies following which, their violations
should be published and they should also be
Additionally, regulators should highlight
the number of instances non-compliant
organisations have been identified, warned
and/or penalised. This will demonstrate that
there are consequences for non-compliance,
which would not be tolerated and would also
show that the playing field is being levelled to
discourage any unfair advantages.
Challenges of the regulators
It would be myopic to believe that regulators
are not themselves faced with challenges where
regulatory compliance is concerned. The truth
is that many of our regulators are very stretched
when it comes to their own resources which
correlates with their ability to build awareness
of requirements, enforce and monitor com-
pliance effectively as well as communicating
such efforts to their stakeholders.
Similarly to affected organisations, regula-
tors also need to keep abreast of all legislative
changes and requirements which continue to
evolve at a rapid pace.
Regulators have substantial influence in
drafting legislation and facilitating stakeholder
consultation sessions, however, they are not
the only influencers.
Feedback on proposed legislative require-
ments and/or the need for amendments need
to be provided by the affected industries to
our lawmakers. This would ensure stakeholder
concerns are considered and ventilated so that
legislative requirements would be reasonable
and better able to achieve their objectives.
Purpose of legislation
Former KPMG managing partner, Raoul
John, summed it up perfectly by saying:
"There would be nothing to manage or reg-
ulate if businesses are unable to service their
clients because of burdensome and impractical
A primary purpose and objective of legis-
lation is to facilitate the long term viability
and sustainability of an industry. Legislation
should not be overly burdensome or become
an impediment to doing business without any
Legislation should protect and promote
ethical business practices, stakeholders and
wider society, the environment and our com-
munities. We should all benefit and seem to
be benefiting from the regulator's oversight
Burden or benefit?
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