SGKH Entities (2021-02-16)

Summary

This is a JFSC public statement announcing civil financial penalties imposed on three related Jersey entities of the Societe Generale Kleinwort Hambros group: SGKH Bank, SGKH Trust and SGKH Corporate (together, the SGKH Entities). The penalties followed an on-site examination that found breaches of Principle 3 (adequate risk management systems) and Principle 6 (open and co-operative dealing with the JFSC) of the relevant Codes of Practice, relating to compliance function resourcing, board oversight, compliance monitoring and failure to notify the JFSC of known issues.

• Penalties imposed: £510,599.67 to SGKH Bank, £155,476.54 to SGKH Trust, and £53,375.00 to SGKH Corporate, following a 50% early-settlement discount under the JFSC settlement procedure.
• Findings: Inadequate board oversight and record-keeping, insufficient compliance function resourcing, incomplete compliance arrangements (no board-approved compliance policy, undocumented compliance function responsibilities), weak Compliance Monitoring Programme design and execution, inadequate compliance reporting to the boards, outdated AML/CFT Business Risk Assessments, and failure to notify the JFSC of known compliance concerns.
• Aggravating factors: SGKH Bank's regulatory compliance record and failure to promptly and candidly notify the JFSC of breaches.
• Mitigating factors: Full co-operation post-examination, board-led remediation with external consultants, significant investment in strengthening compliance, and no customer losses.

The statement is a historical enforcement record concerning these three named entities and does not itself impose new ongoing obligations on the wider regulated population; it reiterates existing requirements under the Codes of Practice, the Money Laundering (Jersey) Order 2008 and the AML/CFT Handbook that all registered persons must already satisfy.

Applies to

banks (deposit-taking business), trust company business, fund services business, investment business, registered persons under Jersey Codes of Practice