MORNBFI Vol. 1 - Planters Development Bank

§§ 4180Q.4 - 4180Q.808.12.31directors on its ongoing implementationand assessing its effectiveness andappropriateness. Senior managementshould, at least once a year, report to theboard of directors or a committee of theboard on matters relevant to thecompliance policy and its implementation,recommending any required changes tothe policy. The report should assist theboard members in making an informedassessment as to whether the institution ismanaging its compliance risk effectively.However, any material breaches of laws,rules and standards shall be reportedpromptly.§ 4180Q.5 (2008 - 4191Q.5) Status ofcompliance function. The compliancefunction should have a formal status withinthe organization established by a charteror other formal document approved by theboard of directors that defines thecompliance function’s standing, authorityand independence, and addresses thefollowing issues:(1) measures to ensure theindependence of the compliance functionfrom the business activities of the QB;(2) its role and responsibilities;(3) its relationship with other functionsor units within the organization;(4) its right to obtain access toinformation necessary to carry out itsresponsibilities;(5) its right to conduct investigationsof possible breaches of the compliancepolicy;(6) its formal reporting relationships tosenior management and the board ofdirectors; and(7) its right of direct access to the boardof directors or an appropriate committeeof the board.The compliance charter or other formaldocument defining the status of thecompliance function shall be communicatedthroughout the organization.§ 4180Q.6 (2008 - 4191Q.6)Independence of compliance functionThe compliance function should beindependent from the business activities ofthe institution. It should be able to carryout its responsibilities on its own initiativein all units or departments wherecompliance risk exists and must beprovided with sufficient resources to carryout its responsibilities effectively. It mustbe free to report to senior managementand the board or a committee of the boardon any irregularities or breaches of laws,rules and standards discovered, withoutfear of retaliation or disfavor frommanagement or other affected parties. Thecompliance function should have accessto all operational areas as well as anyrecords or files necessary to enable it tocarry out its duties and responsibilities.§ 4180Q.7 (2008 - 4191Q.7) Role andresponsibilities of the compliance functionThe role and responsibilities of thecompliance function should be clearlydefined. If there is a division of duties andresponsibilities between different functionssuch as legal, compliance, internal auditor risk management, the allocation ofduties and responsibilities to each functionshould be properly delineated. Thereshould likewise be formal arrangementsfor cooperation between each function andfor the exchange of relevant information.§ 4180Q.8 (2008 - 4191Q.8) Crossborderissues. The compliance function forinstitutions that conduct business in otherjurisdictions should be structured to ensurethat local compliance concerns aresatisfactorily addressed within theframework of the compliance policy forthe organization as a whole. As there aresignificant differences in legislative andregulatory frameworks across countries orfrom jurisdiction to jurisdiction,compliance issues specific to eachQ RegulationsPart I - Page 50Manual of Regulations for Non-Bank Financial Institutions