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GRC Professional : GRC Spring 2011
6 grc professional • Spring 2011 6 grc professional • Spring 2011 news mandatory ethics training for staff of hong kong banks APRA adopts Basel iii implementation in Australia The Australian Prudential Regulation Authority (APRA) has released a discussion paper outlining its proposed implementation of Basel III in Australia, however it is not expected to cause much hassle for Australian banks. Authorised deposit-taking institutions would be required to meet the new minimum capital ratios by 1 January 2013 and the capital conservation buffer from 1 January 2016. Basel III was developed in response to deficiencies in financial regulation revealed by the global financial crisis. singapore exchange amends listing rules The importance of robust internal controls has been reinforced by Singapore Exchange Ltd in a list of amendments to its listing rules. Among the amendments, Rule 719 states that issuers are to have “a robust and effective system of internal controls that addresses financial, operational and compliance risks”. Other amendments refer to the disclosure of information and the circumstances where the Exchange’s approval may be required for appointments of directors, chief executive officers and chief financial officers. The Exchange also commented on the appointment of a governance adviser (GA), noting that the role of the GA “is too widely encompassing to be managed by a single professional”. However it also said the appointment of a GA could be “too demanding to impose on all newly-listed companies, including the well-governed ones”. “The Exchange retains the flexibility to require such an adviser on a ‘when-required’ basis,” it said. nz regulators form council A new Council of Financial Regulators has been established to foster cooperation between financial and prudential regulators in New Zealand. The permanent members of the council are the Reserve Bank and the Financial Markets Authority. Associate members are the Treasury and Ministry of Economic Development. draft of nz Financial markets Conduct Bill released The Ministry of Economic Development has released an exposure draft of the Financial Markets Conduct Bill. The Ministry develops policy relating to the regulation of New Zealand's capital markets, conduct of its participants and the enforcement bodies that oversee the market. AsiC targets unlicensed credit providers The Australian Securities and Investments Commission (ASIC) has launched a targeted compliance campaign to detect unlicensed credit providers. The national campaign, scheduled to run until 30 March 2012, follows a previous ASIC surveillance program between October 2010 and February 2011 which found a number of credit providers were not appropriately registered. Under the new national consumer credit laws, individuals or businesses who engage in credit activities are required to hold an Australian credit licence, or be an authorised representative of a credit licence holder. As at 30 June 2011, 6081 businesses were licenced. FinAnCiAl seRviCes HONG KONG BANKS ARE REQUIRED to provide ethics training for new staff and to include ethics as part of their regular performance review, according to a new policy manual issued by the Hong Kong Monetary Authority (HKMA). The policy manual reminds authorised institutions (AIs) of their obligations to ensure the competence and ethical behaviour of their staff. “The purpose of this module is to reiterate the supervisory expectation that AIs should engage and deploy personnel with sufficient skills, knowledge, experience and soundness of judgement for the discharge of the particular duties and responsibilities allocated to them,” the HKMA said in its guidance module. The policy manual includes the following guidance: • The Board should act to ensure that a culture of competence and ethical behaviour is embedded within the AI at both the firm and individual staff levels. • Staff recruitment and appraisal systems should be designed so as to include competence, professionalism and integrity as key assessment factors. • AIs are expected to include training on professional ethics as part of the induction course provided for all newly recruited staff members. The adherence by staff to acceptable ethical standards of behaviour should be monitored during the course of their work and should be reviewed in the regular performance appraisal. (However the guidelines stop short of mandating ethics and compliance as a KPI.) • Commitment to staff training and development should be expressed in policies promulgated by the Board. Training should not be regarded as an optional additional cost but rather as a fundamental element of a successful business strategy.
GRC Summer 2012