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Doha: The Qatar Financial Centre (QFC) Regulatory Authority yesterday released rules covering three areas of regulation in keeping with international regulatory standards for insurance and banking supervision.
The three areas of regulations cover corporate governance, anti-money laundering and combating the financing of terrorism (AML/CFT) and Islamic finance windows. These final rules follow the conclusion of an industry consultation process, which started in September last year.
Governance and controlled
The new rules seek to strengthen regulation covering governance and risk management by requiring 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 new rules include 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.
The regulatory authority plans to host town hall meetings with firms prior to the commencement of the rules to ensure that the new requirements are well understood. The rules will commence on July 1, 2013.
AML/CFT regime amendments
The rule changes reinforce and refine the current AML/CFT framework by promoting compliance with the recently revised Financial Action Task Force (FATF) international standards and by taking account of experience to date with the implementation of the 2010 rules.
The new requirements are focused on three areas: 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. The rules will commence on February 1, 2013.
Islamic finance amendments
The rule amendments close the operation of all Islamic windows by conventional firms with the exception of takaful insurance business conducted under the insurance business rules 2006. The impact of this rule change will be minimal given the low level of activity conducted through Islamic windows. The rules will commence on February 1, 2013.