Financial Crime World

Corporate Governance and Financial Regulations: SUGEF Ensures Compliance

SUGEF, the financial regulator, is committed to ensuring that banks and other financial institutions comply with strict corporate governance and financial regulations.

Remuneration Requirements

  • All board of directors, senior management teams, and members of control bodies are subject to remuneration and incentive requirements.
  • The board is responsible for approving remuneration conditions and defining a scheme that encourages good performance and promotes acceptable risk management criteria.
  • A Remunerations Technical Committee has been established to monitor the design and function of an adequate remuneration system.

The approved remuneration policy must be:

  • Revised periodically
  • Monitored to ensure its correct application
  • Aligned with the entity’s strategies, business horizon, and level of risks, objectives, values, and long-term interests

Additionally, staff members from units involving risk, compliance, and other control units must have incentives defined independently of any business line or substantial activity, and their performance evaluated according to their own objectives.

AML/KYC: SUGEF Enforces Compliance

Article 15 of the AML Act requires regulated entities to comply with and be supervised by SUGEF for various activities, including systematic or substantial money exchange and transfer operations. To ensure compliance, regulated entities must:

  • Appoint a compliance officer
  • Implement know-your-client (KYC) and know-your-employee (KYE) procedures
  • Keep information about the identity of beneficiaries and clients
  • Register and verify client information
  • Report suspicious transactions

Depositor Protection: SUGEF’s Deposit Guarantee Fund

The Law of the Deposit Guarantee Fund and Liquidation of Financial Entities regulates deposit insurance through a special fund and banking resolution. The Deposit Guarantee Fund (FGD) covers deposits such as savings, accounts, and investments opened in public banks, private banks, and non-bank financial entities.

  • The maximum coverage amount is approximately USD10,000 per person/entity, in local or foreign currency.
  • The FGD receives contributions from regulated entities, with a maximum contribution of 0.15% of total financial intermediation liabilities covered.

SUGEF’s commitment to ensuring compliance with corporate governance and financial regulations has earned the trust of depositors and stakeholders alike.