In the midst of the heightened regulatory environment, global tax and legal advisers would be wise to proceed nimbly, but smart. This was a key message outlined by Abhishek Sharma, Senior Counsel for Thomson Reuters in India, Middle East and North Africa, during ‘Tug of War: Balancing Growth and Regulation Through Uncertainty’, a globalising compliance session at the Thomson Reuters Return to Better conference.
Through moderating the session alongside two guest speakers, Abhishek aimed to explore the concept as to whether organisations are able to remain compliant while sustaining growth during such an uncertain time.
Joined by esteemed panelists, Rebecca Saint, Deputy Commissioner for the Australian Taxation Office (ATO) and Glenn Seah Head of Legal, Compliance and Corporate Secretariat for Singapore Exchange (SGX), expert insights and analysis were offered through a regulatory lens.
The conference session centred around four key themes: compliance, how data influences a regulator’s actions, how regulators engage with organisations to enforce compliance and what the future may look like as markets attempt to recover after COVID-19.
Logic of ‘principle-based regulation’
Rebecca outlined that diminished global travel, business restructures and COVID-19 impacting existing Advanced Pricing Agreements (APAs) within organisations were the three biggest concerns the ATO has observed during the pandemic.
“We’re really committed to working closely with industry groups throughout consultation platforms, and also [with] the taxpayers to be able to provide advice and help them through this period.”– Rebecca Saint, Deputy Commissioner for the Australian Taxation Office
Against the background of tightening borders and regulatory fragmentation between jurisdictions, Glenn emphasised the importance of adopting ‘principle-based regulation’, which centres on outcome-based results, rather than a dogmatic process-based approach.
Data as the key to tracing compliance
As various industries continue to power through the realm of uncertainty that is COVID-19, regulators have the duty to engage with these organisations to ensure there is balance between legal compliance and maintaining growth.
Collecting data from organisations is one of the ways regulators do this. For example, the ATO relies on income tax returns and supporting schedules to identify any high risks that may pose an issue with compliance through machine learning and automation.
“By having such a rich data source, we can really get a very good understanding of how we use machine learning tools to be able to understand where the pockets of risk might actually be sitting in the population,” said Rebecca.
Engaging with enterprises
Glenn encouraged a more collaborative approach between the “rule makers and rule takers”. He mentioned that regulators need to pro-actively listen and understand what the market needs, while market participants should also openly engage regulators on their concerns, as both sides will benefit from open dialogue.
“Be proactive and constructive about approaching your regulators, because most regulators genuinely want to do the right thing and want to hear from you.”– Glenn Seah Head of Legal, Compliance and Corporate Secretariat for Singapore Exchange
For a deeper look at the insights and ideas examined during the ‘Tug of War: Balancing Growth and Regulation Through Uncertainty’ virtual conference, download our comprehensive guide!