Understanding the Working of Financial Organizations and Compliance Management

This report provides an in-depth analysis of the working of financial organizations and ongoing compliance management, using PayPal as a case study. It discusses various aspects such as disclosure criteria, duty of care principles, general obligations of financial service officers, relevant regulations, statutory records, fiduciary duties, contract law principles, and internal monitoring processes. The report concludes by highlighting the importance of maintaining adequate statutory records and fulfilling specific obligations when providing financial services.

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Accounting
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Table of Contents
Introduction:...............................................................................................................................3
Discussion:.................................................................................................................................3
Disclosure of capacity criteria:...................................................................................................3
Duty of care principles:..............................................................................................................3
General obligations of a financial service officers:....................................................................3
Law of principles and agents:....................................................................................................3
Organizations product and services:..........................................................................................3
Relevant agency agreement and broker authority:.....................................................................3
Relevant industry code of practice:............................................................................................3
Relevant regulation pertaining to the financial services industry sector:..................................3
Statutory records a financial service organization needs to maintain:.......................................3
Fiduciary duties:.........................................................................................................................3
Contract law principles:.............................................................................................................3
Internal monitoring process:......................................................................................................3
Conclusion:................................................................................................................................4

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Introduction:
The report is prepared to develop an understanding of the working of the financial
organization and ongoing compliance management by conducting an in depth research. For
the purpose of analysis, the organization that is chosen is Paypal Holding Inc which is one of
the largest online payment companies of America for transferring the funds using online
platform. The system of online payment for the company provides electronic alternatives to
the method of traditional payment such as checks or money order (PayPal, 2019).
Discussion:
Disclosure of capacity criteria:
For the users to be eligible for the services of Paypal, there are certain criteria’s that
evaluates the capacity. It is required by the user to be the resident of one of the countries that
is listed on the page of Paypal worldwide. For opening the account, users are required to
warrant and represent that they are not acting on behalf of anyone. The account is opened
under the disclosure of company that employs a third party disclosure and undisclosed
principal (PayPal, 2019).
Duty of care principles:
The payment market in Australia has seen the emergence of different structures and
regulatory payments. One of the good principles for improving the choice, competitions and
entry is the adoption of more proportionate approach that helps in matching the regulatory
impost with the relative risk.

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General obligations of a financial service officers:
The quality of service is ensured by the officers by observing that the management
and staffs comply with the legislative and operational requirements in their day to day
activities. A responsible officer is required to take efforts to meet the main requirements of
ASIC for the holders of PayPal licences. Furthermore, financial officers should be able to
satisfy one of the options relating to the experience and qualification of the regulation guide
105 of ASIC.
Law of principles and agents:
For the purpose of marketing, personal information is not sold or rented to the third
parties by PayPal without the consent of users and thereby one of the important principles of
PayPal is to protect the privacy of users. The agreement of service is constructed and
governed according to the laws of Singapore without referring to the principles of conflict of
laws. PayPal has implemented procedures and policies that helps them to ensure that they
comply with the regulations and applicable laws. The third party collection agents are utilized
by the financial organization (Paypalobjects.com, 2019).
Organizations product and services:
PayPal employs a platform of two sided global technology for facilitating the
processing of the transactions of payment and allowing the customers with the flexibility of
using their account to purchase and make payments for the good along with withdrawing and
transferring funds. Customers are encouraged to make safe exchange of funds with the
merchant using several funding sources such as PayPal balance, bank account, credit account,
debit and credit card and other stored value products such as gift cards and coupon. The
PayPal working capital and PayPal credit products offers the merchants and customers with

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wide range of financial success depending upon the management of risk in an effective
manner (Paypalobjects.com, 2019).
Relevant agency agreement and broker authority:
Users of PayPal are provided the commercial user entity agreement and they are
considered as the sub merchants of PayPal. In connection with each transactions users are
required to agree with all the requirements along with complying with the operating
regulations of Visa, card network rules and MasterCard bylaws. PayPal is regarded as one of
the most recognizable method of online payment and there is increasing number of brokers
and the forex trading is becoming common as it has the advantage of payment guidelines and
strict rules (Paypalobjects.com, 2019).
Relevant industry code of practice:
The financial organization is committed to conducting the business with the highest
ethical standards and the guidelines and requirements are outlined by the supplier code of
business ethics and conducts for ensuring that the suppliers are operating responsibly and
reflecting the values (Paypalobjects.com, 2019).
Relevant regulation pertaining to the financial services industry sector:
The financial service industry of the country is regulated by many relevant regulations
such as Federal Reserve Act 1914 that created the Federal Reserve System, Dodd Frank Act
2010 that was the greatest overhaul for the regulation of financial services in United States
that brought significant changes to the regulatory framework of bank and its payment
system(Treasury.gov.au, 2019).

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Statutory records a financial service organization needs to maintain:
As a matter of sound administration and good policy, there are a number of records
that should be kept by the financial service organization and they are listed below:
 An updated version of all the rules and register of all members including the
nominated information of contacts.
 All the financial transactions and accounting records and position of the organization
in a manner that allow preparation of the accounts true and fair.
Fiduciary duties:
The organizations engaged in providing financial service should adhere to the two
standards of conduct that is a suitability standard for the brokers and the fiduciary standards
for the advisers who are registered under the Investment advisers act.
Contract law principles:
The contract law principles of PayPal is a set of principles that create legally binding
promise between the customers, agents and service providers. Under the contract act 1999,
the person who is not the party to agreement has no rights and the remedy and rights of the
third parties are not affected.
Internal monitoring process:
A high level of internal control is required for accounting and managing the assets off
the underlying customers accurately. Internal control is adequately established and
maintained by the management of PayPal and they are designed to comply with the
regulations and rules (Zucarro & Bridwell, 2016).

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Conclusion:
The above report addresses the functioning and relevant legislations to the operations
of financial service provider. PayPal has been the worlds recognized platform for transferring
the funds and the brokerage authority of the organization is growing. It has been ascertained
that the PayPal is required to maintain adequate statutory records and the officers are required
to perform specific obligations when providing financial services.

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Reference list:
Investor.paypal-corp.com. (2019). Retrieved 10 June 2019, from https://investor.paypal-
corp.com/static-files/f50b4223-fd92-4989-a4df-5565eda6ee26
Iyer, R., & Moorthy, S. (2015, February). Financial Risk Management in e-commerce Using
Executable Business Process Modeling Notation. In International Conference on
Distributed Computing and Internet Technology (pp. 233-238). Springer, Cham.

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PayPal. (2019). Paypal.com. Retrieved 10 June 2019, from
https://www.paypal.com/pt/webapps/mpp/ua/useragreement-full?locale.x=en_PT
PayPal. (2019). Paypal.com. Retrieved 10 June 2019, from
https://www.paypal.com/in/webapps/mpp/ua/ceagreement-full
Paypalobjects.com. (2019). Retrieved 10 June 2019, from
https://www.paypalobjects.com/digitalassets/c/website/marketing/global/shared/
global/media-resources/documents/paypal-mission-vision-values.pdf
Paypalobjects.com. (2019). Retrieved 10 June 2019, from
https://www.paypalobjects.com/digitalassets/c/website/marketing/global/pages/
about/responsible-practices/supplier-code-of-business-conduct-ethics.pdf
Treasury.gov.au. (2019). Retrieved 10 June 2019, from
https://treasury.gov.au/sites/default/files/2019-03/C2014-053_PayPal_Binder.pdf
Zucarro, M., & Bridwell, L. (2016, July). Financial inclusion and the payments industry.
In Competition Forum (Vol. 14, No. 2, pp. 237-242). American Society for
Competitiveness.

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