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.
‘Robust’
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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The report stated that the STM should strengthen its Gibraltar Compliance Plan. A plan has already been submitted to the GFSC, with more detail as to how monitoring and oversight will be carried out in future, including” a rolling review of intermediaries and clients”, STM said.
Difficult period
The conclusion of the review brings to conclusion a difficult period for STM in Gibraltar.
As reported, initially, STM Group fought the GFSC’s call for an independent review, before agreeing in January this year.
Also, as reported, Alan Kentish, chief executive of STM Group, was arrested in Gibraltar in October 2017 over allegations of a failure to disclose information over a tax dispute involving a client, though he was released without charge. An application for judicial review against the Royal Gibraltar Police was filed to the Supreme Court, following the arrest. (2/2)
