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
EC Issues Regulation on Adjustments to K-Factor Coefficients Under IFR
The European Commission (EC) published a report summarizing responses to the targeted consultation on the supervisory convergence and the single rulebook in the European Union (EU).
OSFI Issues Results of Pilot on Climate Risk Scenario Analysis
The Office of the Superintendent of Financial Institutions (OSFI) published an update on the discussion paper that intended to engage federally regulated financial institutions and other interested stakeholders in a dialog with OSFI, to proactively enhance and align assurance expectations over key regulatory returns.
ECB Issues Opinions on Green Bonds Standard and CRR Proposals
The European Central Bank (ECB) published its opinion on a proposal for a regulation on European green bonds, following a request from the European Parliament.
ESRB Explores Policy Response to Risks Arising from Digitalization
The Advisory Scientific Committee (ASC) of the European Systemic Risk Board (ESRB) published a report that explores the expected impact of digitalization on provision of financial and banking services, and proposes policy measures to address the risks stemming from digitalization.
EU Authorities Address COVID-19 Reporting, MCD, and PSD2 Issues
The European Banking Authority (EBA) announced that the guidelines on the reporting and disclosure of exposures subject to measures COVID-relief measures shall continue to apply until further notice.
FI Publishes Multiple Regulatory and Reporting Updates
The Swedish Financial Supervisory Authority (FI) announced that the capital adequacy reporting as at December 31, 2021 must be done by February 11, 2022.
BSP Tackles Aspects of Lending and Islamic, Open & Sustainable Finance
The Central Bank of the Philippines (BSP) issued communications covering developments related to online lending platforms, open finance framework and roadmap, and on the expected regulations in the area sustainable finance.
US Agencies Issue Regulatory Updates, FDIC Launches Tech Sprint
The Board of Governors of the Federal Reserve System (FED) published the final rule that amends Regulation I to reduce the quarterly reporting burden for member banks by automating the application process for adjusting their subscriptions to the Federal Reserve Bank capital stock, except in the context of mergers.
EBA Issues Guide on Bank Resolvability, Consults on Transferability
The European Banking Authority (EBA) published its assessment of risks through the quarterly Risk Dashboard and the results of the Autumn edition of the Risk Assessment Questionnaire (RAQ).
MFSA Publishes CRD5 Updates and Supervisory Priorities for 2022
The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0.
