STM Group independent review recommends 32 improvements

STM Group has announced that its Gibraltar regulated entities Skilled Person Review has concluded, with 32 findings recommended across the listed entity’s businesses.

The UK-listed cross border financial services group said in a statement today that it is pleased to announce the conclusion of the third party review, which has been quickly welcomed by some market commentators.

Following the announcement earlier today, stock ratings organisation finnCap maintained their “Corporate” rating on STM Group PLC (LON:STM) in an analyst note released earlier today (11 June). The postive reaction will be welcomed as analysts wait for STM to report earnings on 25 July.

STM said that the agreed scope of the independent review covered, inter alia, the “effectiveness and oversight of the companies’ internal compliance function” which is a central service for all the Gibraltar subsidiaries, corporate governance and controls, and an assessment of any potential conflicts of interest arising across the business.

In addition, the review also covered “certain specific areas in relation to the pensions and life assurance business relating to take-on and monitoring procedures for intermediaries, clients and investments advised by intermediaries”.

Independent probe
The independent probe – carried out by Deloitte LLP for certain STM Gibraltar regulated businesses (and the Gibraltar Financial Services Commission under Section 7 of the Financial Services (Information Gathering and Co-operation) Act 2013 – has put forward a number of recommendations in relation to governance, and compliance.

This included “a more embedded risk framework with better defined risk appetite statements and additional non-executive directors for the relevant subsidiary boards”, some of which the company has already implemented.

The report also identified that there should be a more robust framework in place for identifying and recording how potential conflicts of interest across the businesses should be dealt with.

STM added that it welcomes the recommendations put forward in the report by Deloitte and the [STM] companies now expect to “engage with the GFSC in order to discuss the recommendations and agree a plan of action to implement them”.

It added that recommendations will make the group’s businesses “more robust” and the board believes their implementation will ensure that the companies “continue the improvement of the processes and systems that they use to conduct their activities in line with the requirements of the GFSC.”

32 findings
The Report identified 32 findings across the STM companies. This includes seven highlighted as priority where improvements are required to ensure that the businesses comply with the relevant Gibraltarian legislation and best practice and twenty one other findings with recommendations that will help improve the governance and compliance framework of the business. 

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Gary Robinson
Head of Video and Ezines at Open Door Media Publishing. Deputy Editor, International Investment. An experienced journalist and filmmaker with more than 20 years' financial services experience, both as journalist and originally as a fully qualified IFA, Gary works across both International Investment and InvestmentEurope titles. Previous video production credits include projects on BBC, C4 and SKY.

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