Morgan Stanley 2014 Annual Report Download - page 25

The Company’s Investment Management business is also regulated outside the U.S. For example, the FCA is the
primary regulator of the Company’s business in the U.K.; the Financial Services Agency regulates the
Company’s business in Japan; the Hong Kong Securities and Futures Commission regulates the Company’s
business in Hong Kong; and the Monetary Authority of Singapore regulates the Company’s business in
Singapore.
Anti-Money Laundering and Economic Sanctions.
The Company’s Anti-Money Laundering (“AML”) program is coordinated on an enterprise-wide basis. In the
U.S., for example, the Bank Secrecy Act, as amended by the USA PATRIOT Act of 2001, imposes significant
obligations on financial institutions to detect and deter money laundering and terrorist financing activity,
including requiring banks, bank holding company subsidiaries, broker-dealers, futures commission merchants,
introducing brokers and mutual funds to implement AML programs, verify the identity of customers that
maintain accounts, and monitor and report suspicious activity to appropriate law enforcement or regulatory
authorities. Outside the U.S., applicable laws, rules and regulations similarly require designated types of financial
institutions to implement AML programs. The Company has implemented policies, procedures and internal
controls that are designed to comply with all applicable AML laws and regulations. The Company has also
implemented policies, procedures, and internal controls that are designed to comply with the regulations and
economic sanctions programs administered by the U.S. Treasury’s Office of Foreign Assets Control (“OFAC”),
which target foreign countries, entities and individuals based on external threats to U.S. foreign policy, national
security or economic interests, and as applicable similar sanctions programs imposed by foreign governments or
global or regional multilateral organizations such as the United Nations Security Council and the E.U. Council.
Anti-Corruption.
The Company is subject to applicable anti-corruption laws, such as the U.S. Foreign Corrupt Practices Act and
the U.K. Bribery Act, in the jurisdictions in which it operates. Anti-corruption laws generally prohibit offering,
promising, giving, or authorizing others to give anything of value, either directly or indirectly, to a government
official or private party in order to influence official action or otherwise gain an unfair business advantage, such
as to obtain or retain business. The Company has implemented policies, procedures, and internal controls that are
designed to comply with such laws, rules and regulations.
Protection of Client Information.
Many aspects of the Company’s businesses are subject to legal requirements concerning the use and protection of
certain customer information, including those adopted pursuant to the Gramm-Leach-Bliley Act and the Fair and
Accurate Credit Transactions Act of 2003 in the U.S., the E.U. Data Protection Directive and various laws in
Asia, including the Japanese Personal Information (Protection) Law, the Hong Kong Personal Data (Protection)
Ordinance and the Australian Privacy Act. The Company has adopted measures designed to comply with these
and related applicable requirements in all relevant jurisdictions.
Research.
Both U.S. and non-U.S. regulators continue to focus on research conflicts of interest. Research-related
regulations have been implemented in many jurisdictions. In November 2014, FINRA proposed to amend its
equity research rules and adopt new rules for debt research. New and revised requirements resulting from these
regulations and the global research settlement with U.S. federal and state regulators (to which the Company is a
party) have necessitated the development or enhancement of corresponding policies and procedures.
Compensation Practices and Other Regulation.
The Company’s compensation practices are subject to oversight by the Federal Reserve. In particular, the
Company is subject to the Federal Reserve’s guidance that is designed to help ensure that incentive compensation
paid by banking organizations does not encourage imprudent risk-taking that threatens the organizations’ safety
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