The 2nd Annual Compliance Anti-Money Laundering Seminar

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The 2nd Annual Compliance Anti-Money Laundering
Seminar 23rd 24th March 2010, Riyadh Saudi
Arabia Regulatory Challenges
Objectives Michael Lesser Managing Director,
Authorisation Supervision Qatar Financial
Centre Regulatory Authority m.lesser_at_qfcra.com www
.qfcra.com
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Did Regulation Fail?

• Western Regulatory systems
• But was that the problem?
• Did we do that much better in the Region?

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Regulatory Objectives (and challenges)

• Rules Based versus Principles Based?
• Tell me what to do and I will do it

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Regulatory Objectives (and challenges)

• Regulatory objectives should (for the most part)
  parallel organisational objectives
• Do it because it builds a stronger, more robust
  firm that is less likely to fail
• Regulators want that too!

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Regulatory Objectives (and challenges)

• So firms need to understand WHY the regulator
  wants something to happen
• The firms need to buy-in to the concept at all
  levels
• From the top

• To the bottom

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Back to the basics

• Understand the risk
• Capital is king
• Basel II?
• Which Pillar?
• One size does NOT fill all
• Credit risk management
• Rules can help,
• but Principles must govern
• Liquidity
• Good Governance

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Challenges in the GCC

• Convergence
• Establishment of the GCC Central Bank
• Should regulatory requirements be uniform?
• A Single Regulator?
• Why?
• Already established in Bahrain
• To be announced soon in Qatar

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Challenges in the GCC

• Governance
• Did Western standards of governance fail?
• Should standards be adjusted to the region?
• Family owned or controlled financial institutions
• Close relationships
• Independence of directors?

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Good Governance means Good Communication
BOARD
BOARD
Example A
Example B
CEO
CEO
AUDIT
RISK
RISK
AUDIT
COMPLIANCE
COMPLIANCE
BUSINESS
BUSINESS
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A little bit on AML and Compliance

• Compliance culture established in the firm
• Message from the top
• Everyone must understand their role
• Status of the MLRO/compliance officer
• Understand the concerns of your correspondents

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Questions?