mgl.0007 .0001.0279 macquarie equities … · macquarie equities limited ... action 099-2016...

MGL.0007.0001.0279

MACQUARIE EQUITIES LIMITED ("Company" or "MEL") ACN: 002 574 923

MINUTES OF A MEETING OF THE LICENSEE RISK COMMITTEE ("LRC") HELD AT LEVEL 5, l SHELLEY STREET, SYDNEY NSW 2000

PRESENT

APOLOGIES

IN ATTENDANCE

MEETING

MINUTES OF PREVIOUS MEETINGS

OUTSTANDING ACTION ITEMS

ON THURSDAY 28 SEPTEMBER 2017 AT 3.00PM

Members Michelle Weber Lynden Sharpe David Robb

Rob Johnston

Helen Roberts Danny Green Margaret Mane Eylem Kamerakkas

Location Australia (in person) Australia (in person) Australia (in person)

Ms Weber was elected Chair of the meeting and having noted that a quorum was present declared the meeting open at 3.05pm.

The signed minutes of the Committee meeting held on 17 August 2017 were confirmed as a true and correct record of proceedings.

Action 099-2016 Product Working Group (PWG} NOTED that the MEL governance changes were approved at the August meeting. It was further noted that while amendments to the MEL Product & Investment Committee charter had been finalised; amendments for the Private Bank Investment Committee were on hold due to Research staff changes. It was further noted that Private Bank will not be expanding its use of the MEL licence. Matter Closed

Action 010-2017 Credit Risk Function NOTED that a review of derivatives reporting is being undertaken and results will feed into the discussion around the Credit Risk Function. Remains open.

Action 016-2017 Tax Practitioners Board NOTED that Ms Goulter would provide an update for the next meeting. Remains open.

Action 017-2017 SMSF Licensee Standard NOTED that the matter is on hold pending the outcome from the Legal t eam's discussion with FOS. Remains open.

Action 018-2017 Call Recording NOTED that a paper would be submitted for the next meeting to close this matter following discussion with Sheryl Weil. Remains Open

Page I of II

MACQUARIE EQUITIES LIMITED ("Company" or "MEL")

ACN: 002 574 923

MINUTES OF A MEETING OF THE LICENSEE RISK COMMITTEE ("LRC")

HELD AT LEVEL 5, 1 SHELLEY STREET, SYDNEY NSW 2000


Action 024-2017 Licensee Standard Changes

NOTED Op Risk has been engaged to perform a review of

changes to licensee standards as such there is no longer a need

for a summary. Matter Closed.

Action 025~2017 Comparison of Securities

Action 027-2017 Management of Action Items

Matter closed.

Action 028-2017 Breach Reporting

Mr Sharpe advised that RMG Compliance reviewed the client

money incident and reported the findings to David Robb. It was

found that the incident had been assessed and reported to ASIC

in accordance with Macquarie policies and all relevant business

areas were engaged at the appropriate stage. Mr Sharpe

undertook to confirm the approach for reporting to the MEL

board. Matter closed.

Action 029 - 2017 ASIC Breach Report - Adviser Conduct

Mr Sharpe provided the Committee with further background on

the client complaint in relation to a former representative of

MEL including timing of ASIC notification. The Committee noted

conduct occurred after leaving Macquarie and therefore there

was no obligation to report the breach. Matter closed.

Action 030 - 2017 Roadshow Engagement

NOTED that the NSW State Leader had undertaken to reinforce

attendance at annual compliance roadshows. Ms Weber/ Mr

Green would also look at opportunities to reinforce

engagement. Matter closed

Action 031 - 2017 Wholesale Clients Licensee Standard

Mr Green advised that a meeting had been scheduled for early

October. Remains Open

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MGL.0007.0001 .0280

MGL.0007.0001.0281

MACQUARIE EQUITIES LIMITED {"Company" or "MEL") ACN: 002 574 923

MINUTES OF A MEETING OF THE LICENSEE RISK COMMITTEE ("LRC") HELD AT LEVEL 5, 1 SHELLEY STREET, SYDNEY NSW 2000


BEST EXECUTION POLICY REVIEW & UPDATE

LINE 1 SUPERVISION PROGRAM THEMES FOR FY

m

NOTED: The paper titled "Best Execution Policy Review & Update" from Danny Green, Eylem l<amerakkas, and Joanne Garcia dated 20 September 2017.

The Committee discussed the proposal and whether under ASIC Regulatory Guide 223 the inclusion of ASX Centre Point is likely to constitute a material change. Mr Green / Mr Sharpe undertook to further understand Mark Webster's view. Action required 032-2017.

The memorandum from Danny Green and Hilary Wang dated 25 September 2017 titled 'Q3 Supervision Themes' (Supervision Memo) was noted and discussed by the Committee.

The Committee discussed the proposed themes for Q3 being; • Record keeping - product investigation and loading emails

correctly • Fee disclosure • Ongoing service

It was RESOLVED to approve the Q3 Supervision Themes to be incorporated into the supervision activity as set out in the Supervision Memo.

OFFSHORE CLIENTS LICENSEE NOTED: The paper titled "Updated Offshore Clients Licensee STANDARD Standard" from Hilary Wang dated 12 September 2017.

LINE 1 REPORT

Subject to a minor amendment to clarify that the requirement for valid Australian Power of Attorney applies only where permitted in the foreign jurisdiction, it was RESOLVED to approve the updated Offshore Clients Licensee Standard.

NOTED: The Line 1 Licensee Risk Committee Report dated September 2017.

Mr Green provided commentary on the paper. The following items were discussed by the Committee.

The Committee requested a copy of the management plan for Rob Granger including comfort around the clients who w ill remain with t he adviser, details of where the remaining clients will be transferred and revenue share. Action Required 033-2017

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MACQUARIE EQUITIES LIMITED ("Company" or "MEL"}

ACN: 002 574 923




LINE 2 COMPLIANCE REPORT

The Committee discussed proposed changes to the Responsible Managers (RM) and Responsible Executives (RE) for MEL. It was noted that Chris Gray's proposed appointment as RM had been withdrawn due to inability to obtain a police check from Singapore for business purposes. The Committee requested that applications be prepared to appoint Lawrence Narayan and Liza Reynolds as RMs. Rob Johnston should be removed as Key Person as part of the same application. It was further requested that Danny Green replace Michelle Weber as RE Ms Mane undertook to work with Geraldine de Vries for the RM changes and Mark Webster for RE changes. Action required 034-2017

TASA Update Mr Green advised the Committee that there were a number of advisers coming on board shortly whose skill set were predominately financial planning and as such the current supervision model might not be appropriate. Management is currently reviewing the model to determine the best approach forTASA

Probation Period

Ms Weber advised the Committee that management is looking at the parameters for the new advisers passing probation and whether it would be beneficial to have some mid-point checks. The aim would be to flag early warning signs in relation to behavioural aspects including managing risk. The proposal would be presented to the Wealth Management Steering Committee. Mr Green highlighted the difficulty in reviewing advisers against specific actions during the first few months as they would not commence providing advice at that point.

NOTED: The paper titled "RMG Compliance - Macquarie Equities Limited's (MEL's) Licensee Risk Committee Report" from Lynden Sharpe dated 21 September 2017.

Mr Sharpe advised the Committee that one adviser had been referred to the Consequence Management Committee due to repeated incidents relating to advice and order taking obligations.

Mr Sharpe highlighted the issue around incorrect reporting of AFSL IDs for 10 out of approximately 1600 intermediaries. The cause was due to data being extracted from Nova which contained out of date information. A resolution was in progress.

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MGL.0007.0001 .0282

MGL.0007.0001.0283


MINUTES OF A MEETING OF THE LICENSEE RISK COMMITTEE ("LRC") HELD AT LEVEL 5, 1 SHELLEY STREET, SYDNEY NSW 2000


OPERATIONAL RISK REPORT

CREDIT RISK COMMITTEE REPORT

BAU COMPLAINTS REPORT/ ANALYSIS

CONSEQUENCE MANAGEMENT REPORT & SEMI-ANNUAL ANALYSIS

DEAL ASSESMENT COMMITTEE REPORT

COMPLAINTS LICENSEE STANDARD

BFS STAFF TRADING -CHANGE OF REPORTING LINE

COMMITTEE CALENDAR

Settlement and Clearing Compliance Plan The Committee discussed the development of a MEL Settlement and Clearing Compliance Plan. Mr Sharpe highlighted the delivery timeframe is dependent on resources. Mr Sharpe undertook to discuss the matter with Amy Mahony and report back to the Committee with an estimated delivery time. Action required 035-2017

Fee for Service review Ms Weber highlighted resourcing will also be required for the Fee for Service review and noted that she and Mr Robb will discuss requirements in early October.

NOTED: The BFS Operational Risk Update for the period 1 to 31 August 2017.

NOTED: The paper titled "Credit Risk Committee Update" from Alice Gao dated 20 September 2017.

NOTED: The paper titled "MEL EU & BAU Complaints Monthly Summary -August 2017" from Roger Frare and Marcus Jeeves.

NOTED: The paper titled "Consequence Management Report" from Danny Green.

NOTED: The paper titled "DAC Update June -August 2017" from the Deal assessment committee dated 19 September 2017.

NOTED: The paper titled "Updated MEL Complaints Licensee Standard version 1.3" from Hilary Wang dated 22 August 2017.

NOTED: The paper titled "RMG BFS staff trading - change of reporting line from Kaylah Neale and Rob Johnston dated 18 September 2017.

NOTED the calendar of recurring items and that all items due had been submitted to the Committee.

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MACQUARIE EQUITIES LIMITED ("Company'' or "MEL")

ACN: 002 574 923


HELD AT LEVEL 5, 1 SHELLEY STREET, SYDNEY NSW 2000 ON THURSDAY 28 SEPTEMBER 2017 AT 3.00PM

NEXT MEETING NOTED the next meeting had been scheduled for 24 October 2017.

CLOSURE There being no further business the Chair closed the meeting at

4.34pm.

Page6of l l

MGL.0007.0001 .0284


MINUTES OF A MEETING OF THE LICENSEE RISK COMMITTEE ("LRC"} HELD AT LEVEL 5, 1 SHELLEY STREET, SYDNEY NSW 2000


Signed by the Chair as a true and correct record of proceedings.

MGL.0007.0001.0285

r~ Lf ocrw.Qf ~ 1 l DATE

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Ref No. Date Raised 010-2017 20 Apr 2017

016-2017 26 Jun 2017





Action Raised by

Credit Risk Function Rob Johnston The Committee discussed the Credit Risk Function within MEL and requested that

an update be provided at the next meeting on credit resourcing and reporting lines. 27 July 2017 Ms Weber undertook to follow up with Mr Marynissen on this matter, and to address the issue raised by Mr Johnston regarding the Credit Risk and Line One monitoring being dealt with separately. 17 August 2017 Deferred until September. 28 September 2017 NOTED that a review of derivatives reporting is being undertaken and results will feed into the discussion around the Credit Risk Function.

Tax Practitioners Board - Mr Little provided commentary on the five key principals David Robb

of the Code and noted that Macquarie had provided feedback to the TPB on the challenges faced by firms around compliance with the Code. Noted a response had not yet been received from the TPB. Noted the obligations under the Macquarie Group Privacy Policy whereby staff only use or disclose clients' information for the

purpose for which it was collected, with the individual's knowledge or consent or as permitted by law or regulation. Mr Little to discuss the matter further with Mr Robb and report back to the Committee at the next meeting. 27 July 2017 April Goulter is working through the position and will discuss further with David

Robb ahead of the next meeting. 17 August 2017

Advice Design is completing a gap analysis on where MEL currently collects client consent. Mr Green undertook to discuss with April Goulter / Hilary Wang to clarify the specific action and responsibility.

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MGL.0007 .0001 .0286

Responsible Person Date Due Michelle Weber Oct 2017

April Goulter Oct 2017

mgl.0007 .0001.0279 macquarie equities … · macquarie equities limited ... action 099-2016...

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