FINA0085-1

Duration

30h Th

Number of credits

	Master in management (120 ECTS)	5 crédits
	Master in business engineering (120 ECTS)	5 crédits

Lecturer

Yves Francis

Coordinator

Georges Hübner

Language(s) of instruction

English language

Organisation and examination

Teaching in the first semester, review in January

Units courses prerequisite and corequisite

Prerequisite or corequisite units are presented within each program

Learning unit contents

Students are expected to have passed the courses of Banking & Insurance and Investments & Portfolio Management as prerequisites.
This course features in the framework of the CFA Institute University Recognition Program. It spans a significant portion of the CFA Programe Candidate Body of Knowledge (CBOK), and explicitly prepares for the CFA certification.
Course structure: Note: the chronology of the course ay not follow the proposed structure, notably as a function of the availability of invited experts
Part 1: ERC in the Funds Industry (main responsible: Y. Francis)
1. Introduction a. Importance of ethics in finance   b. Difficulties in ethical decision making c. Improving the odds of doing the right thing    2. Ethics in the Funds Industry a. The standards of professional conduct (theory & case studies)      i. Professionalism - Antitrust Disclosure Rules Violation      ii. Integrity of Capital Markets - the case of LIBOR      iii. Duties to Clients - Madoff's Ponzi Scheme      iv. Duties to Employers - GS board member reveals confidential data      v. Investment Analysis, Recommendations, and Action - Investment bank analysts stayed bullish as Valeant struggled      vi. Conflicts of Interest - Aviva traders manipulate deals to boost their fees    b. Applications
3. Compliance in the Funds Industry a. Compliance with enforced regulations (e.g. AIFMD reporting, market abuse controls) b. Compliance with funds governing documents   c. Corporate Governance, segregation of duties and conflicts of interest
4. Regulation in the Funds Industry a. Emergence of new regulations (e.g. UCITS V, AIFMD, MiFID II) b. Regulation enforcement and supervision
Part 2: ERC in Banking (main responsible: G. Hübner)
1. Ethics in Banking    a. Historical perspective: the roots of the financial crisis of 2008    b. Agency conflicts in banking and the responses of the industry    c. The three lines of defense in banking    d. Internal control, internal and external audit (testimonies) 2. Compliance in Banking    a. Consumer protection and the ESMA/FSMA guidelines    b. Anti-Money-Laundering (AML) and the prevention of terrorist attacks    c. Compliance and Legal: a practical view (testimonies) 3. Regulation in Banking    a. The Basel framework revisited in light of the financial history    b. The SSM and the importance of the national supervisory authorities    c. Regulation perspectives (testimonies)

Learning outcomes of the learning unit

The course provides a deep-dive into the main challenges surrounding three dimensions that have become core in the activities of financial institutions after the worldwide financial crisis of 2008:
- Ethics: how has the finance profession been reformed in order to promote an ethical behavior, enabling the financial circuits to play their role as an efficient and reliable channel to transfer resources, risks and maturities throughout the economy?
- Regulation: an unprecedented wave of rules has been adopted at the supranational as well as the national levels. What are the motives and impacts of the ECB, EU, and national-based legal and regulatory measures on the evolution of the financial community?
- Compliance: beyond the mechanical integration of rules and standards of conduct in the financial sector, how is the compliance with these constraints organized and enforced from an organizational perspective?
The course will focus on two types of financial organizations for which these notions are especially relevant, both from an institutional and an environmental (given the particular geopolitical positioning of the Liege region) point of views: banks and investment funds. The prospective structure of the course adopts this splitting approach. For each topic, the course will either be illustrated with relevant experience of finance professionals, or case studies meant to let students appropriate the body of knowledge underlying the key notions of the course.
Intended Key Learning Outcomes:
In concordance with the Key Learning Outcomes of the Master in Management Sciences, this course aims to enable the student to:
- Strategy: Establish a strategy in order to optimize the value chain of a company, an organization or a project * based on the analysis of its financial and economic context. * taking into account its political, social and societal context. * taking into account its legal constraints. * adopting the position of a specialist in the field of management of his / her finality. * demonstrating a critical mind and scientific precision. - Implementation: Take charge of the everyday management of a company, an organization or a project * implementing the strategy that was established for this company, organization or project. * in a holistic perspective, taking into account the interactions between its different functions. * analyzing his/her managerial practice with a critical and ethical mind. - Control: Plan and implement the performance and quality control in a company, an organization or a project * in a holistic perspective, taking into account the interactions between its different functions. - Communication: Communicate efficiently, internally and externally, about a company, organization or project * in English. - Adaptability: Adapt his/her managerial practice to the needs of a fast-evolving world. * showing curiosity and a scientific precision of academic level.

Prerequisite knowledge and skills

- Investments and Portfolio Management (or equivalent) - Banking & Insurance (or equivalent)

Planned learning activities and teaching methods

- Theory sessions (including illustrations and concrete examples) - Special sessions as a function of the topics: A. Ethics: Preparation and presentation of case studies a. on the basis of written documents b. on the basis of videos B. Compliance and Regulation: Presentations by guest experts

Mode of delivery (face-to-face ; distance-learning)

Theory + Exercise sessions
Testimonies: - regulatory and prudential authorities - consultants - audit and compliance officers
Case studies (graded) - on the basis of written documents - on the basis of video documents

Assessment methods and criteria

The final assessment will be in several parts:
- closed-book written exam (50% final grade - individual)
- practical assignment (50% final grade - half of it individual)

Work placement(s)

Organizational remarks

Students will be responsible for getting and viewing the movies "The Big Short" et "Margin Call" in English

Contacts

Professors
Yves Francis CEO, Deloitte Luxembourg yfrancis@deloitte.lu Assistant
Thomas Bonesire N1, Office 111 thomas.bonesire@ulg.ac.be

Ethics, Regulation and Compliance in Finance