Financial Institutions in UAE Must Comply with Stringent Laws and Regulations
The United Arab Emirates (UAE) has implemented a set of robust compliance policies and procedures to strengthen financial governance and prevent non-compliance with central bank laws and regulations.
Compliance is Key
To ensure regulatory obligations are met, industry experts emphasize the importance of equipping compliance staff with the necessary skills and knowledge to effectively manage risk. This includes:
- A comprehensive understanding of relevant laws, regulations, rules, and standards that impact business operations
- Regular education and training to stay up-to-date with changes or amendments to these laws and regulations
- Courses on real-life cases related to money laundering, financing of terrorism, and proliferation financing
Access and Accountability
The compliance function must have:
- Unrestricted access to all staff members, records, and data within the company and its affiliates and subsidiaries
- A consistent approach to compliance across the group through a central compliance function accountable to the board of directors or separate compliance functions in each entity or branch reporting to the head of compliance
Key Responsibilities
The compliance function is responsible for:
- Establishing a compliance policy and plan
- Assessing the adequacy of measures to prevent non-compliance
- Maintaining a culture of responsible conduct
- Identifying and mitigating regulatory risks
- Conducting ongoing training on regulatory obligations
- Enabling confidential reporting by staff
- Addressing instances of non-compliance
- Ensuring disciplinary action is taken
Central Bank Emphasis
The UAE’s central bank has emphasized the importance of compliance in the financial sector, highlighting the need for financial institutions to have robust policies and procedures in place to prevent breaches of legal or regulatory obligations. Non-compliance can result in severe penalties, including fines and even license revocation.
Conclusion
To maintain public trust and confidence in the financial sector, financial institutions operating in the UAE must adopt a comprehensive approach to compliance. This includes:
- Establishing robust policies and procedures
- Providing ongoing training and support
- Ensuring accountability at all levels
By prioritizing compliance and taking proactive steps to ensure regulatory obligations are met, financial institutions can mitigate risk and maintain public trust in the financial sector.