Compliance


Compliance risk is defined as the risk of legal or regulatory sanctions, material financial loss, or loss to reputation a bank may suffer as a result of its failure to comply with laws, regulations, rules, related self-regulatory organization standards, and codes of conduct applicable to its banking activities.

Compliance should be part of the culture of the organization; it is not just the responsibility of specialist compliance staff. Nevertheless, a bank will be able to manage its compliance risk more effectively if it has a compliance function in place that is consistent with BDL Circular No. 128 dated 12/1/2013.

A bank should organize its compliance function and set priorities for the management of its compliance risk in a way that is consistent with its own risk management strategy and structures.

Compliance concerns everyone within the bank and should be viewed as an integral part of the bank’s business activities. A bank should hold itself to high standards when carrying on business, and at all times strive to observe the spirit as well as the letter of the law.

Banks and Financial Institutions are expected to adopt effective compliance policies and procedures, and comply with laws, rules and standards relating to market conduct, managing conflicts of interest, treating customers fairly, ensuring the suitability of customer advice, as well as preventing money laundering and terrorist financing.

Basel References
Title Date of Issue 
Sound Management of Risks Related to Money Laundering and Financing of Terrorism  15/1/2014
Compliance and the Compliance Function in Banks  29/4/2005

 

BDL related Basic Circulars
Banks Financial Institutions
BDL Basic Circular No. 128 En Ar
BDL Basic Circular No. 126 En Ar
BDL  Basic Circular No. 83 En Ar