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 Adopts Financial Reporting Changes Arising from Benchmark Reforms
EC published Regulation 2021/25 that addresses amendments related to the financial reporting consequences of replacement of the existing interest rate benchmarks with alternative reference rates.
BIS Bulletin Examines Key Elements of Policy Response to Cyber Risk
BIS published a bulletin, or a note, that examines the cyber threat landscape in the context of the pandemic and discusses policies to reduce risks to financial stability.
HMT Updates List of Post-Brexit Equivalence Decisions in UK
HM Treasury, also known as HMT, has updated the table containing the list of the equivalence decisions that came into effect in UK at the end of the transition period of its withdrawal from EU.
EBA Issues Erratum for Technical Package on Reporting Framework 3.0
EBA published an erratum for technical package on phase 1 of the reporting framework 3.0.
APRA Publishes FAQ on Measurement of Credit Risk Weighted Assets
APRA updated a frequently asked question (FAQ), for authorized deposit-taking institutions, on the measurement of credit risk weighted assets.
EBA Publishes Risk Dashboard for Third Quarter of 2020
EBA published the quarterly risk dashboard, along with the results of the Risk Assessment Questionnaire survey among 60 banks and 15 market analysts.
ECB Analysis Shows Privacy as Biggest Concern in Use of Digital Euro
ECB concluded the public consultation on the introduction of a digital euro in EU.
ECB Finalizes Guide on Supervisory Approach to Bank Consolidation
ECB published a guide that sets out the supervisory approach to consolidation in the banking sector.
SRB Chair Outlines Work Priorities for 2021
The SRB Chair Elke König published an article setting out work priorities for 2021.
FDIC Selects Companies to Compete in Final Phase of Tech Sprint
FDIC has selected 11 technology companies—including BearingPoint, Fed Reporter, Inc, and S&P Global Market Intelligence, LLC—for inclusion in the third and final phase of the rapid prototyping competition.
