Set out in this document are a set of core principles for surveillance that firms may wish to adopt in order to identify, determine and establish an effective surveillance function, which includes, but is not limited to:
- Preserving independence from front office to allow a surveillance function to be effective;
- An effective surveillance operating model (including how responsibilities and interactions occur between the first and second lines of defence);
- An understanding of where surveillance can be used as an effective control and would strengthen the overall control environment;
- A determination of where automated surveillance would provide a more comprehensive and effective control than manual surveillance; and
- An appreciation that an effective surveillance function will differ depending on the nature, extent and sophistication of the business conducted by each market participant.