Noteable

Understanding Registrable Controllers:
A Simple Guide

Singapore companies, foreign companies operating in Singapore and Limited Liability Partnerships (LLPs) ( "entities") are required to keep a Register of Registrable Controllers (RORC) either at their registered office address or at the registered office of their appointed Corporate Service Provider. Registrable controllers are also commonly known as the beneficial owners of the entities. 

Some common questions about Registrable Controllers, explained in plain language:

Q: How do companies find their controllers? 

A: Companies (including foreign ones) and Limited Liability Partnerships (LLPs) need to ask their directors (for companies) or managers/partners (for LLPs) to help identify the controllers. This involves sending a notice to each member of the company who directly holds 5% or more of the voting shares, asking them to confirm if they are controllers or know anyone who is a controller. Usually, the controllers are the shareholders or partners.

If someone doesn't respond to the notice within 30 days, the company/LLP should still put that person's details in their Register of Registrable Controllers (RORC), but with a note saying the information hasn't been confirmed. This should be done within 7 days after the 30-day period ends.

Q: Are shareholders with more than 25% of shares considered controllers? Do their details go in the RORC?

A: Yes! Anyone owning over 25% of the shares has a "significant interest" and is considered a controller. Their information must be included in the RORC.

Q: What if no one owns more than 25% of the shares? Does that mean there's no controller?

A: Not necessarily. You should look for individuals or legal entities that have "significant control," like the power to appoint or remove a majority of the directors. These individuals should be recognized as controllers.

For more detailed guidance, check the official ACRA guidelines.

Q: Can a society or licensed trust company be a controller?

A: Absolutely. Any local or foreign entity, including societies and trust companies, can be a controller.

Q: How does a company identify controllers when a trust is involved?

A: The company needs to send a notice to the trustee. The trustee must then (a) confirm and provide their details if they are a registrable controller, and (b) tell the company about any other registrable controllers or people who might know about them.

Again, refer to the ACRA guidelines for more info.

Q: If the controller's details are already in the business profile (like shareholders), do I still need to check their particulars?

A: Yes! Companies and LLPs must always trace their controllers and include their information in the RORC.

Q: I own and control the whole company. Do I still need a RORC and send notices to myself?

A: Yes, you still need to maintain the RORC and file the information with ACRA. However, you don't need to send a notice to yourself.

Q: I still can't find any controllers. What should I do?

A: If you can't identify a controller with "significant interest" or "significant control," you need to identify individuals with "executive control" as your registrable controllers. For companies, this means directors with executive control and the CEO. For LLPs, it's the partners with executive control.

When updating ACRA, select "No" to the question "Is the entity exempted from RORC requirements," then select "No controller identified." Complete the new section by selecting and updating the particulars of the individual(s) with executive control before submitting the information.

Keep records of all the steps you've taken to find the controllers, as ACRA may ask for proof that you've made a reasonable effort.

Q: Can someone else confirm the controller's details for them?

A: No, the controllers have to personally confirm their own details by signing and dating the confirmation.

Q: Can ACRA tell me who my controller is?

A: No, ACRA can't identify your controller for you. Check the ACRA guidelines for help.

Q: Do new companies need to send notices to controllers before filing the RORC?

A: No, you don't need to send notices before filing. You should already know who your registrable controllers are before you apply to incorporate or register. Once approved, you can file the RORC information via the "Update Register of Registrable Controller" eService in Bizfile.

January 2026

Hong Kong vs. Singapore: The Fintech Founder's Regulatory & Capital-Map

Choosing between Hong Kong and Singapore is not a branding exercise. It’s a foundational strategic decision that from day one dictates your licence pathway, banking relationships, investor pool, and talent access. For fintech founders—especially in crypto, payments, and capital markets—the decision is binary and consequential.

The core divergence is this: Singapore is built for institutional ASEAN integration,  while Hong Kong is engineered for China-adjacent capital markets and trading.

The Singapore Equation: The ASEAN Institutional Gateway

Regulatory DNA: Progressive, structured, and integrated. The Monetary Authority of Singapore (MAS) operates with a "test and learn" ethos but within a clear, compliance-first framework. The goal is systemic stability and becoming the trusted node for institutional finance innovation.

• Licence Clarity: Frameworks like the Payment Services Act (PSA) provide specific licences (MPI, SPI) for digital payment token services. The process is rigorous, but the rules of the game are published. For stablecoins, MAS has pioneered a world-first stability-focused regulatory framework. If you're in B2B payments, infrastructure, custody, or stablecoins, this clarity is oxygen.

• Capital & Investors: Singapore commands the ASEAN fintech funding lion's share. Its investor base is a mix of global VCs, sovereign wealth funds (Temasek, GIC), and Asian family offices seeking ASEAN-market exposure. The thesis here is scaling solutions across Southeast Asia's 650-million-person integrated economy.

• Talent & Hires: Deep bench in compliance, regulatory tech, traditional finance (TradFi) digitization, and engineering focused on scalable B2B systems. The talent pool understands how to build for institutions and corporates.

• The Evidence: Look at the domicile of ASEAN's payments and infra unicorns and majors (NIUM, Coda, Fazz). They're overwhelmingly Singapore-headquartered. It's the operational and regulatory base for serving the region.

Singapore’s Weight: It wins when your primary customers are banks, corporates, and other licensed financial institutions across Southeast Asia, and your path requires building unshakable institutional trust.

The Hong Kong Equation: The China-Adjacent Trading & Capital Markets Nexus

Regulatory DNA: Pragmatic, market-oriented, and strategically aligned with facilitating financial flows and asset intermediation. The Hong Kong Monetary Authority (HKMA) and Securities and Futures Commission (SFC) have moved decisively to create a regulated environment for virtual assets, with a focus on trading, brokerage, and tokenization of traditional assets.

• Licence Focus: The Virtual Asset Service Provider (VASP) licence for exchanges and the SFC's regimes for security token offerings (STOs) and automated trading services are the centerpieces. The regulatory energy is on bringing crypto into the regulated securities and trading umbrella. If you're an exchange, brokerage, or focused on tokenized securities/RWA, this is your native environment.

• Capital & Investors: The capital is different. It's dominated by high-frequency traders, crypto-native funds, China-Greater Bay Area (GBA) family offices, and the proprietary capital of global brokers and banks already entrenched in Hong Kong's equity and debt markets. The thesis is liquidity, arbitrage, and bridging Chinese capital with global digital assets.

• Talent & Hires: Unmatched concentration of talent in trading systems, quant finance, exchange operations, and capital markets structuring. You hire here to build deep, liquid markets and complex financial products.

• The Evidence: Hong Kong's 2024-2025 marquee fintech moves are licensed virtual asset platforms (HashKey, OSL expansion), tokenization pilots of bonds and funds (by HSBC, Standard Chartered), and gold/commodities tokenization. It’s where traditional finance pilots its digital asset market infrastructure.

Hong Kong’s Weight: It wins when your business is fundamentally about trading, asset intermediation, liquidity provision, and capturing the unique capital flows between China and the world.

The Decision Is Not Yours; It's Your Business Model's

The mistake is picking a "hub" and twisting your model to fit. The evidence mandates the reverse: Let your business model pick the jurisdiction.

• Building the "Stripe for ASEAN"? The regulatory clarity, institutional investor base, and integrated market access point to Singapore.

• Building the "BlackRock for tokenized RWAs" targeting Chinese capital? The trading ecosystem, broker relationships, and regulatory focus on tokenization point to Hong Kong.

Choose the map that actually contains the territory you're trying to conquer. Everything else—licensing, banking, funding, hiring—will flow from that first-principles alignment.

Choose with purpose. Build with precision.

For Singapore:

#SingaporeFintech #MASregulated #InstitutionalGrade #ASEANGateway #FintechInfrastructure #PaymentsHub #DigitalAssets #StablecoinHub #RegulatoryClarity #B2BFintech #TradFi #CryptoCustody #FundingEcosystem #VCfunded #SGInnovation #TechTalent #GlobalHQ #ComplianceFirst #FutureOfFinance #SGisFintech

For Hong Kong:

#HongKongFintech #HKVASP #VirtualAssets #Tokenization #TradingHub #CapitalMarkets #GreaterBayArea #ChinaGateway #DigitalFinance #RWAs #AssetTokenization #CryptoExchange #FinancialFlows #HKMA #SFClincensed #Web3HongKong #LiquidityHub #TradingTech #GBAFintech #HKInnovation

Hybrid/Decision Context:

#FintechStrategy #RegulatoryArbitrage #MarketAccess #FounderDecision #GoToMarket #LicenseFirst #CapitalFollows #BankingChallenges #InstitutionalMoney #GeopoliticalStrategy #EmergingMarkets #DigitalEconomy #Web3 #CryptoRegulation #LocationMatters #BusinessIncorporation #StrategicHQ

December 2025

FAQ: Trademarks

1. What is a trademark and why is it important to register a trademark?

A trademark is a distinctive sign that identifies certain goods or services as those produced or provided by a specific person or company. Registering a trademark grants the owner exclusive rights to use the mark in relation to the goods or services it covers. It is important to register a trademark to protect the brand identity, prevent others from using similar marks, and to enforce legal rights in case of infringement or wrongful use.

2. What can be registered as a trademark?

In Singapore, any sign capable of being represented graphically, such as words, logos, names, colours, letters, numerals, or a combination of these elements, can be registered as a trademark, provided it is unique, non-offensive, not similar to registered trademarks or well known signifiers or design devices used by famous international brands. Trademarks should be capable of distinguishing the goods or services of one undertaking from those of others.

3. How do I know if my trademark is available for registration?

You can conduct a trademark search through the Intellectual Property Office of Singapore (IPOS) to check if your mark is available for registration. A comprehensive search will help determine if there are any conflicting marks already registered that may affect the registrability of your trademark.

4. What are the benefits of registering a trademark?

Registering a trademark provides exclusive rights to use the mark in connection with the goods or services it covers. It also serves as a valuable asset, enhances brand recognition, and provides legal protection against unauthorized use or infringement. As an asset, it can be licenced, transferred and treated as an intangible asset.

5. What is the process for registering a trademark?

The process for registering a trademark in Singapore involves filing an application with IPOS, which includes a formal examination, publication for opposition, and if unopposed, the issuance of a registration certificate.

6. How long does it take to register a trademark?

The time to register a trademark in Singapore can vary according to the complexity and factors such as the prevalence of similar or competing marks, but the process generally takes around 6 to 12 months from the date of filing to registration, assuming no objections or oppositions are raised.

7. What are the costs associated with trademark registration?

The formal lodgement costs of trademark registration in Singapore include filing fees, examination fees, publication fees, and other associated expenses. The Intellectual Property Office of Singapore (IPOS) has the following fee structure for trademark registration:

1. Filing an application for registration of a trademark in one class: SGD 341

2. Filing an application for registration of a trademark in each additional class after the first: SGD 341

3. Filing a request for a search and examination report for a trademark: SGD 181

4. Registration of a trademark: SGD 341

5. Renewal of a trademark registration in one class (for 10 years): SGD 341

6. Renewal of a trademark registration in each additional class (for 10 years): SGD 341

The total cost plus agent fees can vary depending on factors such as the number of classes and the complexity of the application. Our Fees are available upon request.

8. What happens after a trademark is registered?

Once a trademark is registered, the owner gains exclusive rights to use the mark in connection with the goods or services it covers. The registration is valid for an initial period of 10 years and can be renewed indefinitely. We will act as your agent for registration and respond to challenges if appointed. A watching brief to spot potential similar or infringement marks is available upon request.

9. What is the difference between a ® symbol and a TM symbol?

The ® symbol indicates that a trademark is registered, while the TM symbol is used to indicate that a mark is being used as a trademark, but has not been registered.

10. What are the potential reasons for trademark application refusal?

Trademark applications may be refused if the mark is descriptive, lacks distinctiveness, is identical or similar to earlier trademarks, or is contrary to public policy or accepted principles of morality. The other main grounds for refusal is the existence of similar or analogous marks being used by others either in Singapore or internationally with a greater priority to the use of their mark.

11. Can I register a trademark internationally?

Yes, it is possible to register a trademark internationally through mechanisms such as the Madrid System for the International Registration of Marks, which allows for the filing of a single application to obtain protection in multiple countries. We are able to assist to submit under the Madrid protocol to the World Intellectual Property Organization (WIPO) directly, please enquire for fees estimate based on your existing mark.

12. What are the common mistakes to avoid during the trademark registration process?

Common mistakes to avoid during the trademark registration process include inadequate trademark searches, choosing descriptive or generic marks, not providing sufficient evidence of distinctiveness for non-traditional marks, and not seeking professional legal advice when needed. If required, evidence of prior or intended use may be requested to supplement the application. 

[Non-use after registration is the second most common reason for loss of rights over the mark after registration.]

December 2025

FAQ: Incorporating a Company in Singapore

Incorporation

1. What is the process for incorporating a Singapore Pte Ltd company?
Incorporating a company in Singapore has become increasingly popular due to its favourable business environment and attractive tax incentives. To ensure a smooth incorporation process, there are several basic requirements that need to be fulfilled. Firstly, a company must have at least one shareholder who can be an individual or a corporate entity. The minimum number of shareholders required is one, and there is no restriction on their nationality or residency. Secondly, every company must appoint a resident director who is either a Singapore citizen, permanent resident, or holder of an employment pass. The process itself involves: reserving a company name with the Accounting and Corporate Regulatory Authority (ACRA), preparing the incorporation documents (e.g., Constitution), and submitting the application online via ACRA's BizFile+ portal.

2. What are the benefits of incorporating a company versus a Limited Liability Partnership (LLP)?
When considering the structure of a business, the decision to incorporate as a company or form a Limited Liability Partnership (LLP) can have significant implications. Incorporating a company offers several benefits compared to an LLP. Firstly, a company provides limited liability protection, meaning that shareholders' personal assets are protected from the company's debts and liabilities. In contrast, in an LLP, partners have joint and several liability, potentially exposing their personal assets. A company also has perpetual succession, making it easier to attract external investment through the issuance of shares, and is often viewed as a more established and credible entity by clients and financial institutions.

3. What is the difference between a Private Limited and an LLP?
A company has perpetual existence, meaning it can continue its operations even if shareholders change or pass away, while an LLP may dissolve upon the departure or death of a partner. Another advantage is the potential for easier access to funding and investment opportunities for a company, as it can issue shares, whereas an LLP may face more limitations in this regard. Companies also enjoy greater flexibility in terms of ownership transfer and succession planning. From a tax perspective, a company enjoys tax exemptions on its first S$200,000 of chargeable income for its first three years, while an LLP is taxed as a partnership (partners are taxed individually on their share of profits). However, it's important to note that each business structure has its own unique advantages and disadvantages, and the choice between incorporating a company or forming an LLP should be based on individual circumstances and needs.

4. How much does it cost to incorporate a Singapore company?
The list of fees applicable for transactions relating to company limited by shares.

No. Company Transaction Fee

1       Name application     $15

2       Registration fee           $300

3       Annual filing               $60

Note: These are the official ACRA fees. Engaging a corporate service provider will involve additional professional fees for their services, which can vary.

5. What ongoing obligations are there after incorporating a company?
After incorporation, a company has several key ongoing compliance obligations. These include:

• Company Secretary: The company must appoint a qualified company secretary within six months of its incorporation who ensures compliance with statutory obligations.

• Registered Address: A local registered address is required for the company's registered office.

• Annual General Meeting (AGM): Hold an AGM once every calendar year.

• Annual Returns: File Annual Returns with ACRA.

• Financial Statements: Prepare and lodge financial statements in compliance with the Singapore Financial Reporting Standards.

• Corporate Tax: File corporate income tax returns with the Inland Revenue Authority of Singapore (IRAS) annually.
  It is important to note that while these are the basic requirements, there may be additional conditions depending on the nature of the company's activities, such as obtaining specific licenses or permits. It is advisable to seek professional assistance or consult with a corporate services provider to ensure compliance with all necessary regulations.

6. Do I need a lawyer to incorporate my company?
No, you do not necessarily need a lawyer. The incorporation process can be completed directly by the company's proposed directors or shareholders via ACRA's online portal, BizFile+. However, most businesses choose to engage a professional corporate service provider. These providers are experts in the process, ensure all legal and regulatory requirements are met, handle the documentation, and can provide valuable advice on corporate structure and ongoing compliance, saving you time and reducing the risk of errors.

7. Can I change the legal structure of my company after it's been incorporated?
Yes, it is possible to change your business's legal structure, but the process can be complex. For example, converting a Private Limited Company to an LLP (or vice-versa) is considered a transfer of business and involves a formal application, settling of all liabilities, and potentially tax implications. It is not a simple administrative change and should be undertaken with careful planning and professional advice to understand the legal, financial, and tax consequences.

8. What are the major legal risks associated with incorporating a company?
The primary legal risks for a incorporated company include:

• Breach of Directors' Duties: Directors have fiduciary duties (e.g., to act in the company's best interest, avoid conflicts of interest). Breaching these can lead to personal liability.

• Non-Compliance: Failure to meet ongoing statutory obligations (e.g., filing annual returns, holding AGMs) can result in heavy fines for the company and its officers, and even lead to strike-off the register.

• Piercing the Corporate Veil: In cases of fraud or where the company is used as a sham, courts may "pierce the corporate veil," holding shareholders personally liable for corporate debts.

• Contractual and Tortious Liabilities: The company is liable for its contracts and for any harm it causes to others (e.g., negligence).

9. How long does it take to incorporate a company?
Usually, ACRA takes 1-3 days to register a Singapore company. If your application gets referred to the Minister, approval may take up to 2 months. It also depends on how quickly you and other shareholders and directors submit the required documentation to your company secretary for verification. Using a corporate service provider can often streamline this process to as little as one day, provided all documents are in order.

10. What resources are available to help me incorporate a company?
The primary government resource is the Accounting and Corporate Regulatory Authority (ACRA) and its BizFile+ portal. Other helpful resources include:

• nterprise Singapore: For information on grants and business support.

• Inland Revenue Authority of Singapore (IRAS): For tax-related information.

• Professional Corporate Service Providers: These firms offer end-to-end incorporation services and ongoing secretarial support.

• Law Firms and Accounting Firms: Many offer incorporation advisory and services, especially for complex structures.

Memo Outlining a Business Investment Evaluation 

In deciding on investing in a business, creating an investment memo is a structured approach that helps clarify the investment opportunity and communicate it effectively to potential investors. Below is a draft memo outlining how to evaluate a business investment.

Investment Memo: Decision-Making Framework for Business Investment

Date: [Insert Date]
Prepared by: [Your Name]
Subject: Framework for Evaluating Business Investment Opportunities

A.            Purpose of the Memo

This memo outlines the key components to consider when evaluating potential investments in businesses. It serves as a guide to ensure thorough analysis and informed decision-making.

B.            Executive Summary

• Business Overview: Provide a concise description of the business, including its mission, vision, and the problem it aims to solve.

• Market Opportunity: Summarize the market landscape, including size, growth potential, and trends that support the business's viability.

• Investment Proposition: Clearly state why this investment is attractive, highlighting potential returns and strategic fit.

C.             Key Components of Evaluation

1. Company Summary

   • Describe the business model, products/services offered, and the unique value proposition.

   • Include insights on the founding team and their relevant experience.

2. Market Analysis

   • Analyse the target market, including total addressable market (TAM), serviceable available market (SAM), and serviceable obtainable market (SOM).

   • Assess market trends, customer demographics, and potential growth rates.

3. Competitive Landscape

   • Identify key competitors and analyze their strengths and weaknesses.

   • Highlight the business's competitive advantages and barriers to entry.

4. Financial Performance

   • Review historical financials, including revenue, profit margins, and cash flow.

   • Project future financial performance based on realistic assumptions and market conditions.

5. Business Model and Strategy

   • Detail the revenue model, pricing strategy, and sales channels.

   • Discuss growth strategies, including customer acquisition tactics and potential partnerships.

6. Risk Assessment

   • Identify potential risks, including market, operational, and financial risks.

   • Evaluate the management team's ability to mitigate these risks.

7. Exit Strategy

   • Outline potential exit strategies for the investment, such as acquisition or IPO.

   • Discuss the timeline and expected returns from these exits.

D.            Conclusion and Recommendations

Summarize the findings from the analysis, articulating whether the investment aligns with strategic objectives and risk tolerance. Provide a clear recommendation on whether to proceed with the investment, including any conditions or further due diligence required. 

This structured approach ensures that all critical aspects of the investment opportunity are considered, enabling informed decision-making and effective communication with stakeholders.

November 2025

Emerging trends in AI – Implications for the Legal Profession

The recent upsurge of the adoption of Artificial Intelligence (AI) since the launch of easily accessible AI apps like Chat GPT in 2022 has brought significant changes to various industries, and the legal field is no exception. One area where AI is making a notable impact is in the review and preparation of legal documents. Tasks that were once time-consuming and labour-intensive, such as reviewing standard contracts, conducting due diligence, and managing discovery processes, can now be automated.

Emergent AI trends include (i) Data Privacy and Security, (ii) the question of ownership of derived or generated data, (ii) the accountability and liability surrounding decisions arising from an autonomous process, (iii) slippery slope between Fairness and Bias, (iv) the increased burden of Regulatory Compliance, (iv) the virtual Practice of Law when opinions and decisions arise from AI generated logic, and (v) issue of legality of autonomous decisions made without human intervention.

In anticipation of the legal challenges posed by AI’s impact in areas such as Intellectual Property, Liability, Privacy, Bias, and Regulatory Compliance; SAL has launched initiatives to educate legal professionals about emerging technologies, including AI, and their legal implications. One such initiative is the Future Law Innovation Programme (FLIP).

This program supports the development of legal tech solutions, including those involving AI, to improve access to justice and legal services. By fostering collaboration between legal professionals, technologists, and policymakers, SAL aims to ensure that Singapore’s legal system remains adaptable and forward-looking in the age of AI. Lawyers in Singapore and beyond can look to SAL’s initiatives and frameworks for guidance on navigating the complex legal landscape of AI.

During the public consultation on Singapore's generative AI regulation, the Model AI Governance Framework for Generative AI, Infocomm Media Development Authority (IMDA) and the AI Verify Foundation received over 70 responses from a mix of local and international stakeholders, including companies and policymakers. Feedback emphasized the importance of balancing innovation with responsible governance, addressing risks such as data quality, copyright concerns, and safety while fostering trust in generative AI systems. Respondents supported the framework's nine dimensions, which include accountability, data governance, and content provenance, but also highlighted the need for practical solutions aligned with market realities to ensure AI systems are human-centric and ethical.

The most common themes in the feedback IMDA received during the public consultation on the Generative AI Policy framework include:

1.               Balancing Innovation and Governance: Stakeholders emphasized the need to foster innovation while ensuring responsible governance, particularly addressing risks like bias, misuse, and safety concerns.

2.               Transparency and Accountability: Respondents supported clear accountability mechanisms and transparency in AI operations to build trust in generative AI systems.

3.               Practical Implementation: There was a call for practical and market-aligned solutions to ensure the framework is feasible for businesses to implement effectively.

4.               Content Provenance and Copyright: Concerns were raised about ensuring data quality, protecting intellectual property, and managing copyright issues in generative AI outputs.

5.               Stakeholder Collaboration: Feedback highlighted the importance of collaboration between regulators, industry players, and society to address evolving challenges in AI governance.

In encapsulating the essence of Singapore's approach to AI regulation, one finds a pragmatic and inclusive framework that seeks to not only address the immediate challenges posed by generative AI but also to lay a robust foundation for the ethical and human-centric evolution of AI technologies. It is no doubt that AI offers exciting opportunities to enhance efficiency and accuracy in the administration of justice, it also presents significant challenges. To fully realize the potential of AI, a proactive approach is needed—one that emphasizes accountability, bias mitigation strategies, and transparency in the implementation of AI decision-making. Only then can we ensure that AI serves as a fair and effective tool in the legal profession.

Hash Tags

#Generative_AI_Policy

#Intellectual_Property,

#Liability, #Privacy, #Bias, and #Regulatory_Compliance

The Rule of Thumb in an Increasingly Digital World

“In English, the phrase Rule of Thumb refers to
an approximate method for doing something,
based on practical experience rather than theory.”

Wikipedia quoting the Oxford English Dictionary (3rd ed.).
  Oxford University Press. September 2019.

In the labyrinth of human decision-making, the "rule of thumb" stands as a curious guide—a quick heuristic that simplifies complexity, offering quick solutions to problems that might otherwise require exhaustive analysis. It is a mental shortcut, a whimsical pragmatic tool that has been passed down through generations, embedded in our collective wisdom that transends culture and religion.

Yet, as we navigate an increasingly digital world, where data is abundant and algorithms reign supreme, the rule of thumb reveals itself as both a useful ally and a potential adversary. Its utility like the proverbial Swiss army knife is undeniable, but so too are its limitations. In this exploration, we will delve into the dual nature of the rule of thumb, examining its benefits and pitfalls, and reflecting on why a nuanced understanding of the use and utility of this skill is more critical than ever before.

The Origins and Utility of the Rule of Thumb

The term "Rule of Thumb" is believed to have originated from the practice of using one's thumb as a rough measurement tool. Carpenters, for instance, would use the width of their thumb to estimate inches, a practice that, while not precise, was sufficiently accurate for many everyday tasks. This historical anecdote encapsulates the essence of the rule of thumb: it is a practical, experience-based guideline that allows for quick decision-making in the absence of perfect information. So does the adoption of the metric system meant the accuracy is now measured on a 2.54cm scale?

The digital age has only amplified the utility of such rules. With the sheer volume of information available online, individuals are often overwhelmed by choices. Rules of thumb serve as cognitive filters, helping people navigate this information overload. For instance, the "two-minute rule" in productivity—which suggests that if a task takes less than two minutes, it should be done immediately—helps individuals prioritize and manage their time effectively in a world where distractions are just a click away.

The Dark Side of the Rule of Thumb

However, the rule of thumb is not without its drawbacks. Its very strength—its simplicity—can also be its Achilles' heel. By reducing complex decisions to a set of generalized guidelines, rules of thumb can lead to oversimplification and, in some cases, outright error. This is particularly problematic in a digital world where the stakes are often higher, and the consequences of poor decision-making can be magnified on a base 32, 64 or Gb quantum.

Take, for example, the realm of cybersecurity. A common rule of thumb is to use strong, unique passwords for each online account. While this is sound practical homely sounding advice, it can lead to a false sense of security if not accompanied by a deeper understanding of how passwords can be compromised. In reality, even the strongest password can be rendered useless if a password is poorly chosen, is reused across multiple sites, or if it is stored in an insecure manner. The rule of thumb, in this case, provides a starting point, but it is not a substitute for a comprehensive approach to online security. Even the simple adage of changing your password routinely would end up in a series of iterative password generation scheme like Passsword1, Password2… etc. such repetitive adherence becomes its chink in the armour of cybersecurity practices.

The Digital World: A New Frontier for the Rule of Thumb

As we move further into the digital age, the need for a good sense of the depths and limits to the rule of thumb becomes increasingly apparent. The digital world is characterized by rapid change, where new technologies, platforms, and trends emerge at an unprecedented pace. In such an environment, the ability to make quick, informed decisions is crucial. Rules of thumb provide a way to navigate this complexity, offering a set of guidelines that can be applied across a wide range of situations. Complex ideas and schemes can be easily simplified into close anolog examples but they increasingly rely of the return to anolog/linear rules which may no longer apply like before.

Consider the rise of artificial intelligence (AI) and machine learning. These technologies are transforming industries, from healthcare to finance, and are increasingly being integrated into our daily lives. However, they also raise important ethical and practical questions. How do we ensure that AI systems are fair and unbiased? How do we balance the benefits of automation with the potential for job displacement? In the absence of clear answers, rules of thumb can serve as a useful starting point. For instance, the principle of "transparency" in AI—ensuring that the decision-making processes of algorithms are understandable to humans—is a rule of thumb that can help guide the development and deployment of these technologies.

Yet, as with any rule of thumb, there are limitations. The principle of transparency, while important, may not always be feasible or desirable. In some cases, the complexity of AI systems may make it difficult to achieve full transparency. In others, there may be legitimate reasons for keeping certain aspects of an algorithm opaque, such as protecting intellectual property or preventing malicious actors from gaming the system. The rule of thumb, in this case, provides a useful guideline, but it is not a universal panacea.

The Need for a Nuanced Approach

The digital world demands a more nuanced approach to the rule of thumb. While these heuristics can be incredibly useful, they must be applied with care, taking into account the specific context and the potential for unintended consequences. This requires a deeper understanding of the underlying principles, as well as a willingness to adapt and refine our rules of thumb as new information becomes available.

One way to achieve this is through the concept of "meta-rules"—rules about how to apply rules. For instance, a meta-rule might be to always question the assumptions underlying a rule of thumb, and to consider whether it is appropriate for the situation at hand. This approach encourages critical thinking and helps to guard against the pitfalls of oversimplification.

Another important consideration is the role of data in refining our rules of thumb. In the digital age, we have access to vast amounts of data that can be used to test and validate our heuristics. For example, in the context of personal finance, data analytics can be used to assess the effectiveness of the 50/30/20 rule for different income levels and lifestyles. This data-driven approach allows us to refine our rules of thumb, making them more accurate and relevant to our individual circumstances.

Conclusion: The Rule of Thumb in a Digital World

In conclusion, the rule of thumb is a double-edged sword, offering both utility and potential harm in equal measure. In an increasingly digital world, where the pace of change is rapid and the stakes are high, the ability to apply rules of thumb effectively is more important than ever. However, this requires a nuanced approach, one that takes into account the specific context, the potential for unintended consequences, and the role of data in refining our heuristics.

As we navigate the complexities of the digital age, we must strive to strike a balance between the simplicity of the rule of thumb and the need for deeper understanding. By doing so, we can harness the power of these mental shortcuts while avoiding their pitfalls, ensuring that we make informed, thoughtful decisions in a world that is constantly evolving. The rule of thumb, when used wisely, can be a valuable tool in our cognitive arsenal—a guide that helps us navigate the digital labyrinth with confidence and clarity.

February 2025

2025 Challenges for Compliance and Risk Management

Compliance and risk management professionals face numerous challenges, particularly in this new economy. The landscape is evolving rapidly due to regulatory changes, economic pressures, and technological advancements. Here are some of the key challenges they encounter:

1. Mounting Regulatory Requirements

The increasing complexity of regulations, especially related to sanctions and anti-money laundering (AML), poses significant challenges. For instance, compliance officers must navigate new sanctions against Russian entities while adhering to stringent laws like the UK Economic Crime Act, which enhances AML powers and increases compliance burdens[1]. The need for robust compliance frameworks that can adapt to these changes is critical.

2. Economic Pressures

Ongoing geopolitical tensions, such as the war in Ukraine, the Middle East and rising inflation, exacerbate the workload for compliance teams. These economic factors not only increase the volume of compliance tasks but also create uncertainty regarding future regulatory landscapes[1]. 

3. Siloed Functions and Disconnected Systems

Many organizations struggle with siloed compliance functions where responsibilities are divided across departments without effective communication. This disconnection leads to inefficiencies and duplicated efforts in managing compliance across various business lines[2]. Additionally, outdated or incompatible technology systems hinder data sharing and complicate compliance management.

4. Declining Manual Processes

Reliance on manual processes, such as spreadsheets and shared documents, is prevalent in many organizations. These methods are not scalable, legacy grounded, and are prone to human error, especially when adapting to frequent regulatory changes[2]. Compliance teams often spend excessive time updating reports instead of focusing on strategic initiatives. The need to continue upgrade cannot be over emphasised.

5. Lack of Visibility and Metrics

Without an integrated view of compliance activities, organizations struggle to identify gaps in their compliance efforts. The absence of comprehensive metrics makes it challenging to assess performance and risks effectively[2]. This lack of visibility can lead to significant compliance oversights.

6. Evolving Risks and Compliance Expectations

Regulators expect organizations to demonstrate effective risk management practices that evolve with emerging threats. This includes maintaining a proactive stance on issues like conduct evolving risk and ethical business practices, particularly in areas related to environmental, social, and governance (ESG) factors[3]. Companies must invest in technology and skilled personnel to meet these expectations. The introduction of carbon accounting and remote monitoring tools and practices will make such expectations evolve at increasing faster rate. 

7. Impact of COVID-19++

The pandemic (which continues to mutate) has intensified existing challenges by creating regulatory disruptions that require immediate attention from compliance teams. As businesses adapt to new operational realities, compliance functions must remain agile in responding to both ongoing changes and emerging risks[2].

8. Resource Allocation

Effective compliance management requires adequate resources—both financial and human. Organizations must ensure that their compliance programs are well-funded and staffed with skilled professionals who can navigate the complexities of modern regulatory environments[4]. The expectation that "more to be done with less" is omnipresent.

In summary, compliance and risk management professionals face a multifaceted array of challenges that require strategic responses to maintain effective oversight in an increasingly complex regulatory landscape. Addressing these issues involves investing in technology, improving interdepartmental communication, and ensuring that teams are equipped with the necessary skills and resources to adapt swiftly to changes.

Citations:

[1] https://www.fullcircl.com/blog/six-challenges-for-compliance-officers-in-2023

[2] https://riskonnect.com/compliance/industry-news-5-biggest-challenges-to-effective-compliance-management/

[3] https://kpmg.com/us/en/articles/2022/ten-key-regulatory-challenges-2023-risk-governance.html

[4] https://kpmg.com/us/en/articles/2020/ten-key-fs-challenges-2021-compliance-risk.html

[5] https://www.linkedin.com/pulse/challenges-compliance-risk-management-pain-points-solutions-rdjnc

January 2025

Trump 2.0

The recent re-election of Donald Trump as president again has significant implications for businesses, particularly in the context of anticipated inflationary pressures and evolving economic trends. As Trump prepares to take office again, you should look at recalibrating your view of regional investments and business prospects.

1. Economic Policy Shifts

• Inflation Management: Trump's administration is expected to adopt policies that could influence inflationary trends. Historically, his approach has included tax cuts and deregulation, which may stimulate economic growth but could also lead to increased inflation if demand outpaces supply. The potential for expansive fiscal policies might exacerbate inflationary pressures, especially if coupled with rising energy prices due to his pro-fossil fuel stance.

2. Trade Relations and Global Supply Chains

• Trade War with China: Trump's return raises concerns about a renewed trade conflict with China, which could disrupt global supply chains. His previous administration's tariffs on Chinese goods significantly impacted prices and availability of products in the U.S., contributing to inflation. Businesses may need to brace for similar disruptions, which could lead to higher costs for imported goods and materials.

3. Regulatory Environment

• Deregulation: Trump has signalled intentions to roll back regulations across various sectors, including environmental protections and labour laws. While this could reduce operational costs for businesses in the short term, it might also lead to long-term consequences such as environmental degradation and labour unrest, potentially destabilizing markets and contributing to inflationary pressures.

4. Energy Policy

• Fossil Fuel Focus: With appointments like Chris Wright as energy secretary, Trump's administration is likely to prioritize fossil fuel production. This could lead to lower energy prices initially but may also result in volatility in energy markets as geopolitical tensions rise or as climate-related events impact supply chains. The focus on fossil fuels contrasts sharply with global trends toward renewable energy, potentially isolating the U.S. from international markets that are shifting towards sustainability.

5. Consumer Confidence and Spending

• Market Sentiment: The political climate under Trump may affect consumer confidence and spending patterns. If businesses perceive a stable regulatory environment and potential tax relief, they might increase investments and hiring, which can stimulate economic activity. However, uncertainty regarding inflation and interest rates could dampen consumer spending, impacting overall economic growth.

6. Geopolitical Considerations

• International Relations: Trump's approach to foreign policy could lead to heightened tensions with other nations, especially China. This geopolitical instability can create uncertainty in global markets, affecting investment decisions and potentially leading to inflation through increased risk premiums on imports and exports.

Conclusion

The prospects for businesses under Trump's renewed presidency are intertwined with anticipated inflationary pressures stemming from the outcome and impacts from his economic policies, trade relations, regulatory changes, and geopolitical dynamics.

November 2024

Trump 2.0 CODA - the rout has begun, Trump's nominee for high Cabinet offices have reflect the implementation of Project 2025, the assumption of power (hidden behind the hyperbolic noise and fireworks). Watch this space.

Maximisation problem explained

So what does that mean for us as decision makers, do we become risk adverse and not take chances to forge ahead. Yes and No, we don't make foolish choices or reckless toss of the dice. However, in turn, we have to be clear about what is our compertative advantage. Know what we must do well to succeed but not blindly "go for number 1" without regards to "know what makes us good enough".

The new norm encourages diversity and inclusion but ignores the basic truths that people will spend coin when they see value and are risk adverse for new things that don't pan out after the first bite. No point focusing on getting the customer through the door, what works is 'sustainable', the return buyer or second sip. 

Published August 2024

The Reverse Praetor Choice