Skip to main content
Back Custom print Text Only Rich Text Print / Save as PDF
Download Original PDF

  • 5. Board of Directors and Senior Management Responsibilities

    • 5.1 Board of Directors (The Board)

      5.1.1The Board has an oversight responsibility (2) to ensure that senior management develop and implement the detailed internal policies and procedures for offering of new products and services.
       
      5.1.2The Board is responsible for ensuring that product and service risks are well managed, and the needs and rights of consumers are appropriately addressed.
       
      5.1.3The Board must review whether the offering of products and services by the bank remains consistent with the risk appetite approved by the board and internal policies and procedures for offering of new products and services.
       
      5.1.4The Board must review and revise the bank’s risk appetite when the offering of products and services by the bank is no longer consistent with the approved risk appetite. Any changes to the risk appetite must be justified and documented with detailed risk assessment, taking into consideration the risk management capabilities and risk bearing capacity of the bank. The Board must also ensure that internal policies and procedures are updated by senior management accordingly following changes in risk appetite.
       

      (2) The management function responsible for overseeing the operations of Foreign Bank Branch (FBB) are to ensure that policies an d procedures for new products and services are consistent with the requirement of this regulation, and effectively implemented in its operations.

    • 5.2 Senior Management

      5.2.1Senior management are responsible for the design, implementation, and compliance of the bank’s new products and services with the Board approved internal policies and procedures for offering of new products and services.
       
      5.2.2Senior management must ensure that offering of any new or existing products and services must fall within the scope of banking business as defined in the Banking Control Law.
       
      5.2.3Senior management must ensure that that risks arising from new products and services are well understood and aligned to the bank’s risk appetite and tolerance level.
       
      5.2.4Senior management has to determine whether the change to any product or service is considered to be a material change (3).
       
      5.2.5Senior management must periodically review the appropriateness of the products and services internal policies and procedures and whether they continue to meet the objectives as set out in this regulation, and must propose to the Board that the policies and procedures be amended if this is no longer the case.
       
      5.2.6Senior management must identify and mitigate potential negative effects on the bank's reputation either actual or perceived.
       
      5.2.7Senior management must ensure that there are full operational readiness to support new products and services, including processes, controls and systems infrastructure and approvals from other authorities are obtained prior to offering new products and services, where relevant.
       

      (3) Chief Risk Officer (CRO) and Chief Compliance Officer (CCO), in coordination with the product or service developer, are responsible for determining whether the change to any product or service is considered to be a material change.