MAS Issues Guidelines to Promote Senior Management Accountability
MAS published the guidelines on individual accountability and conduct at financial institutions. The guidelines focus on the measures that financial institutions should put in place to promote the individual accountability of senior managers, strengthen oversight over material risk personnel, and reinforce standards of proper conduct among all employees. The guidelines become effective on September 10, 2021. MAS also published a set of frequently asked questions (FAQs) and an infographic on the guidelines, along with an information paper on culture and conduct practices of financial institutions.
The guidelines on individual accountability and conduct apply on a group basis for locally incorporated banks and insurers, along with the approved exchanges and approved clearing houses that are operated as a single group. The guidelines set out the following five accountability and conduct outcomes that financial institutions should achieve:
- Senior managers responsible for managing and conducting the financial institutions' core functions are clearly identified.
- Senior managers are fit and proper for their roles and held responsible for the actions of their employees and the conduct of the business under their purview.
- Financial institutions' governance framework supports senior managers’ performance of their roles and responsibilities, with a clear and transparent management structure and reporting relationships.
- Material risk personnel are fit and proper for their roles and are subject to effective risk governance and appropriate incentive structures and standards of conduct.
- The financial institution has a framework that promotes and sustains, among all employees, the desired conduct.
The guidance stipulates that financial institutions with smaller number of employees, such as those with fewer than 50 headcount, should still achieve the five outcomes, but will not ordinarily be expected to adopt the specific guidance described in the guidelines. The accompanying information paper on culture and conduct practices of financial institutions sets out the MAS approach toward culture and conduct, outcomes that financial institutions should work toward, and examples of good practices that financial institutions can adopt. The information paper is based on a thematic review of banks, insurers, and capital market intermediaries. MAS also held industry engagement sessions to exchange views and ideas with financial institutions.
Effective Date: September 10, 2021
Keywords: Asia Pacific, Singapore, Banking, Insurance, Securities, Operational Risk, Governance, Conduct Risk, MAS
Previous Article
EBA Updates List of Validation Rules for Reporting by BanksRelated Articles
PRA and FPC Finalize Changes to Leverage Ratio Framework in UK
The Prudential Regulation Authority (PRA) published the final policy statement PS21/21 on the leverage ratio framework in the UK. PS21/21, which sets out the final policy of both the Financial Policy Committee (FPC) and PRA
CFPB Proposes Rule on Small Business Lending Data Collection
The Consumer Financial Protection Bureau (CFPB) proposed to amend Regulation B to implement changes to the Equal Credit Opportunity Act (ECOA) under Section 1071 of the Dodd-Frank Act.
PRA Decides to Maintain O-SII Buffers for Another Year
The Prudential Regulation Authority (PRA) decided to maintain, at the 2019 levels, the buffer rates for the Other Systemically Important Institutions (O-SII) for another year, with no new rates to be set until December 2023.
FSB Report Assesses Implementation of Recommendations on Stablecoins
The Financial Stability Board (FSB) published a progress report on implementation of its high-level recommendations for the regulation, supervision, and oversight of global stablecoin arrangements.
APRA Updates Loan Serviceability Expectations for Home Lending
In a letter to the authorized deposit taking institutions, the Australian Prudential Regulation Authority (APRA) announced an increase in the minimum interest rate buffer it expects banks to use when assessing the serviceability of home loan applications.
CPMI and IOSCO Consult on Guidance on Stablecoin Arrangements
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) are consulting on the preliminary guidance that clarifies that stablecoin arrangements should observe international standards for payment, clearing, and settlement systems.
EBA and EIOPA Set Out Work Priorities for 2022
The European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA) have set out their respective work priorities for 2022.
MFSA Issues Reporting Updates and Guidance for Banks
The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0, in addition to the reporting module on leverage under the common reporting (COREP) framework.
EC Publishes Decision on List of Equivalent Third Countries Under CRR
The European Commission (EC) published the Implementing Decision 2021/1753 on the equivalence of supervisory and regulatory requirements of certain third countries and territories for the purposes of the treatment of exposures, in accordance with the Capital Requirements Regulation or CRR (575/2013).
EC Rule on Contractual Recognition of Write-Down and Conversion Powers
EC published the Implementing Regulation 2021/1751, which lays down implementing technical standards on uniform formats and templates for notification of determination of the impracticability of including contractual recognition of write-down and conversion powers.
