FINA0085-1

Duration

30h Th

Number of credits

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

Lecturer

Yves Francis

Language(s) of instruction

English language

Organisation and examination

Teaching in the first semester, review in January

Schedule

Schedule online

Units courses prerequisite and corequisite

Prerequisite or corequisite units are presented within each program

Learning unit contents

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.
It is tailored to students with either an audit background or an investment management / financial engineeering background.
Course structure: Part 1: The importance of Ethics in Finance
In addition to exploring the theories of ethics, the class will feature real-life examples of ethical issues, covering general and specific cases that investment and finance professionals may typically encounter. Key ethical issues such as conflicts of interests, fiduciary duties, obligations towards clients, agent-principal issues, transparency requirements, ...will be covered and illustrated with real-life examples. This section will more specifically cover the application of CFA Institute's Code of Ethics and Professional Standards of Practice.
Part 2: The importance of regulations in Finance
Over the last decade, and specifically related to the 2008 financial crisis, the level of regulation has grown immensely across the finance industry, covering all sectors (banking, asset management, insurance, financial markets discipline, ...). This section will cover the most important pieces of regulations and position them in the broader financial context. The following pieces of regulations will be covered:
- Basel regulations, AML regulations, Market Abuse, MIFID-MIFIR
Part 3: The importance of Compliance and proper governance in Finance
The compliance function is a key component of the three lines of defence model and of a proper governance system. The roles and responsibilities of the compliance function will be illustrated through practical examples and will be based on testimonies from financial professional assuming those duties.
Practical situations analysis
Students will be required to read the following books for practical illustrations:
Owen Walker, 'Built on a lie - The rise and fall of Neil Woodford and the fate of Middle England's money' (2021), Penguin Business
John Carreyrou, 'Bad blood: Theranos scandal secret and lies in a Silicon Valley start-up' (2018), Knopf
Students will be required to watch the following film (Youtube)
Enron: the smartest guys in the room

Learning outcomes of the learning unit

The course provides a deep-dive into the main challenges surrounding three dimensions that have become more and more critical and inter-related in the activities of financial institutions after the worldwide financial crisis of 2008:
- Ethics: will address the professional intersection where financial theory meets practice and where the concept of ethical behavior crosses from the asbtract to the concrete. High ethical principles and professional standards are essential to positive outcomes; rules and regulations, while necessary, are not sufficient by themselves
- 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:
This course aims to enable the student to:

Prerequisite knowledge and skills

- Notions of Investments and Portfolio Management (or equivalent) - Basic understanding of audit processes

Planned learning activities and teaching methods

- Theory sessions (including illustrations and concrete examples)
- Ethical standards and rules of professional conduct CFA with pratical tests
- Imposed Readings of financial scandals case studies - Special sessions as a function of the topics: A. Ethics: Preparation and presentation of group case studies a. on the basis of written documents and reports b. on the basis of videos B. Compliance and Regulation: Presentations by guest experts (regulators, consultants, bankers)

Mode of delivery (face to face, distance learning, hybrid 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

Work placement(s)

Organizational remarks

Lectures will take place every Monday from 4:15 to 7:15 pm, as from September 21st, for a total of 30 hours.

Contacts

Professor
Yves Francis yfrancis@uliege.be

Ethics, Regulation and Compliance in Finance