16: Confidentiality

Question 1

What are the two legislation on data protection?

Answer 1

GDPR - EU law on data protection that gives individuals control over their personal info

Data Protection Act - extends domestic data protection laws to areas not covered by GDPR

Question 2

What rules are under both GDPR and Data Protection Act?

Answer 2

• anyone who processes personal info must ensure it’s protected
• individuals have a right to access their data, and info on how its been protected
• personal data can only be held if there is a specific lawful reason to do so, or permission has been given

Question 3

What are the risks to confidentiality?

Answer 3

Accidental disclosure!
Improper use of client info

Info should be kept confidential:
- in social environments
- within the firm
- after the end of a business relationship
- when changing employment or acquiring a new client

Question 4

Safeguards?

Answer 4

Physical and electronic

And communicating to staff the importance of all this

Question 5

When is there a right and a duty to disclose client info?

Answer 5

Right to disclose
- client permission obtained
- disclosure is in the public interest
- defend a firm in a negligence claim

Duty to disclose
- if ordered to disclose by a court
- required to by a regulator
- suspicions of money laundering (report to National Crime Agency)
- suspicions of terrorism (report to Police)

Question 6

How does a firm deal with money laundering?

Answer 6

Firstly, dont inform the client, this is a tipping off offence

Firms must both have:
- money laundering nominated officer
- Money Laundering Compliance Principal (MLCP)

Can be one person in both. They must either be on the board or SLT.

Responsible for firm’s compliance, for receiving internal reports, and for making disclosures to NCA

Question 7

How should firm deal with conflict of interest?

Answer 7

• notify the relevant clients of the situation
• seek their consent to continue to act for both parties

The firm must demonstrate that their work on one client will not adversely affect another client

Question 8

Safeguards for conflict of interest?

Answer 8

Separate teams

Information barriers
- no overlap between teams
- physical separation of teams
- procedures for maintaining security of paper and electronic records

Confidentiality agreements signed by employees and partners

Review of the application of safeguards by an independent partner

If this is not sufficient, firm may have to cease to act for one or both clients