I. Consultation Paper 2012/01: Proposed Governance and Controlled Function Rules 2012The proposed rule changes aim to strengthen the current Controls Rulebook by promoting compliance with the recently revised principles established by the International Association of Insurance Supervisors and the Basel Committee on Banking Supervision which set international standards for insurance and banking supervision respectively.
The draft rules require the governing body of a QFC authorised firm to approve and establish a:
• formal governance framework;
• risk management and internal controls framework; and
• remuneration policy.
In addition the draft rules propose a new controlled function for internal audit for QFC insurers, QFC banks (i.e. PIIB Category 1) and QFC Islamic banks (i.e. PIIB Category 5) and a new requirement for QFC banks and QFC Islamic banks to have a risk management function. Other detailed proposals are outlined in the consultation paper and draft rules.
These proposals are relevant to authorised firms and approved individuals as well as prospective firms who will have individuals seeking approval.
The consultation period for responses is open until 12 November 2012.
II. Consultation Paper 2012/02: Proposed Anti-Money Laundering and Combating the Financing of Terrorism ("AML/CFT") regime amendmentsThe proposed rule changes reinforce and refine the current AML/CFT framework by promoting compliance with the recently revised FATF international standards and by taking account of experience to date with the implementation of the 2010 rules. There are three areas in which rule amendments are proposed:
• minor and technical amendments to the rules arising as a result of revisions to FATF standards and recommendations;
• amendments applicable to all firms in regard to the residency requirement for Money Laundering Reporting Officers; and
• a revised regime for General Insurance business firms contained in a new standalone rulebook.
These proposals are relevant to all authorised and licensed firms as well as prospective firms.
The consultation period for responses is open until 5 November 2012.
These initiatives support the Regulatory Authority's commitment to meet high international regulatory standards and the continued development of the QFC as a leading financial and business centre.