Financial Crime World

Guaranteeing Proper Monitoring of Business Conduct in Liechtenstein’s Financial Sector

Strengthening the Financial Sector through Effective Governance

In a move to enhance the stability and security of its financial sector, the board of directors and general management of banks and investment firms in Liechtenstein are being urged to ensure proper monitoring of business conduct. According to Article 22, Paragraph 4 of the Banking Act (BA), the board of directors is responsible for the overall direction, supervision, and control of the bank or investment firm.

Responsibilities of the Board of Directors

The board of directors must:

  • Ensure that the company’s business is conducted in accordance with the law, regulations, and internal policies
  • Establish adequate systems and processes to monitor and control the company’s activities
  • Set clear goals and objectives
  • Monitor performance and take corrective action when necessary

Responsibilities of General Management

The general management of the company must:

  • Ensure that the business is conducted in a fair and transparent manner
  • Properly document all transactions
  • Establish adequate controls to prevent fraud and other forms of financial crime

Compliance with Regulatory Framework

Banks and investment firms must also comply with various regulations and guidelines set by regulatory bodies, such as the Financial Market Authority (FMA).

Liechtenstein’s Well-Developed Regulatory Framework

Liechtenstein has a well-developed regulatory framework in place to ensure the stability and security of its financial sector. The country is a member of the European Economic Area (EEA) and has implemented many EU regulations.

  • The Banking Act (BA) sets out the basic rules for banks and investment firms, including requirements for capital adequacy, liquidity, and risk management.
  • The Securities Trading Act (STA) regulates securities trading and the supervision of securities companies.

Recent Developments

In recent years, Liechtenstein has taken steps to strengthen its regulatory framework in response to changes in the global financial landscape. These include:

  • The establishment of a resolution authority to resolve failing banks and investment firms
  • Guidelines published by the FMA for banks and investment firms on how to implement new regulations

Conclusion

In conclusion, the board of directors and general management of banks and investment firms in Liechtenstein must ensure that they have adequate systems and processes in place to monitor and control their business conduct. This includes setting clear goals and objectives, monitoring performance, and taking corrective action when necessary.

By implementing these regulations and guidelines, banks and investment firms can help to ensure that the financial system remains stable and secure. The regulatory framework in Liechtenstein provides a stable and secure environment for the financial sector, and the country’s membership of the EEA ensures access to EU regulations and guidelines.