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
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