What Is a Compliance Audit?

Compliance means that the business activities of a commercial bank are consistent with laws, rules and standards. From the Basel Banking Supervision Committee's definition of compliance risks, bank compliance refers specifically to compliance with laws, regulations, regulatory rules or standards.

Compliance

In recent years, the term compliance by law has been frequently used in the supervision and management of commercial banks in China. However, many people's understanding of the concept of "compliance" is superficial, and some understand "compliance" as the operation and management behavior of banks and their branches must conform to the rules and regulations formulated by the bank's head office; some will "compliance" "Simply understood as compliance, and non-compliance is violation. Obviously, these understandings are inconsistent with the international banking industry's understanding of "compliance." The "commercial bank compliance risk management guidelines" also clarified the meaning of compliance as follows: "It means that the business activities of commercial banks are consistent with laws, rules and standards." Laws, rules and standards related to bank operations, Includes regulations such as anti-money laundering, preventing terrorists from financing activities, guidelines involving banking operations including issues such as avoiding or reducing conflicts of interest, privacy, data protection, and consumer credit, etc. The above-mentioned laws, rules, and standards can also be extended to laws, rules, and standards outside the scope of banking operations, such as labor and employment laws and regulations and tax laws. Laws, rules and standards may have different origins, including laws, rules and standards developed by regulatory authorities, market conventions, industry codes established by industry associations, and internal codes of conduct applicable to internal bank employees. They should include not only those legally binding documents, but also broader codes of conduct for honesty and integrity and fair dealing.

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A bank's compliance culture is a definition of how a bank manages such risks based on compliance risks stipulated in the Basel Accord. The construction of compliance culture is a part of compliance risk management, and it is also a part of corporate culture construction. If compliance risk management is taken as the scope of corporate culture construction, compliance risk management will stagnate in the area of consciousness, which is not conducive to bank risk prevention. . If the entire bank strictly adheres to high standards of ethical conduct, then the bank's compliance risk management is most effective. The board of directors and senior management should take a series of measures to promote the construction of the bank's organizational culture, so that all employees, including senior management, can comply with laws, rules and standards when conducting banking business. When banks establish an internal compliance department, they should follow the principles set out in this document, and the compliance department should support the management department to promote a ethical culture based on professional ethics, thereby promoting the formation of an efficient and effective compliance culture. Corporate governance environment. A bank is a typical risk management enterprise. Its risk management characteristics determine that the bank's operating activities are always accompanied by risks. Its business process is a process of managing risks. This requires banks to change the routine of extensive management, establish a set of professional behavior norms and methods for effectively managing various risks, and form a strong compliance culture within the bank to achieve compliance for everyone. All employees must have sufficient professional prudence, personal integrity with good integrity, and good risk awareness and code of conduct. Banks must have a clear accountability and accountability system, as well as corresponding incentive and restraint mechanisms.The formation of all employees is a matter of course. His professional career and the responsible atmosphere of his post have gradually formed a new compliance culture for China's banking industry management. This in itself is the process of building a bank's compliance risk management mechanism. The formation of this compliance culture is essential for effective bank management.

The main characteristics of an efficient compliance culture are the employees' grasp of the laws, regulatory requirements, rules applicable to trust companies, relevant departmental guidelines formulated by the trust industry association, and the code of conduct applicable to the trust company's own business activities and its understanding of violations. Highly sensitive, it requires compliance awareness to permeate the behaviors of all employees in the enterprise and become a conscious and necessary code of conduct. The company's board of directors and senior management should make clear to all business departments and management departments that they value compliance and sound operation and have ultimate responsibility. At the same time, the business departments and management departments should be directly responsible for compliance operations. Department managers should actively ask the company's board of directors and senior management for the reasons for expanding management authority and investment authority. The establishment and change of financial accounts and the use of large amounts of funds should be handled in accordance with operating procedures. Employees in compliance positions must perform their duties and have sufficient Experience and the courage of "satisfied and dared to pull the emperor", by means of the company, actively and independently analyze and query the risk connotation of an act, adhere to the principles and report the analysis of the risk of violations to relevant departments and leaders, Take risks out of your behavior. The trust business manager and the general staff of the management department also have to perform their respective functions, and "there is always land and contention" in the process of controlling risks. Only by forming a compliance culture that is fully integrated and implemented, can the banner of compliance operations fly high.

Compliance refers to aligning the activities of a trust company with the applicable laws, regulatory requirements, rules, relevant departmental guidelines formulated by the trust industry association, and the code of conduct applicable to the trust company's own business activities. Compliance risk refers to the risk that a trust company may fail to comply with compliance laws, rules and standards, and may be subject to legal sanctions or regulatory penalties, and major financial losses. Compliance risk is an important incentive for other risks of a trust company. Compliance is a risk management activity within a trust company. The process of compliance risk management is the foundation and core of a trust company to build an effective internal control mechanism. Only when the trust company is based on effective compliance risk management can the management of operational risk, market risk, credit risk and other related risks be more effective. The highest level of compliance risk management should be to establish a compliance culture. Trust companies should promote and cultivate their own compliance culture, and regard compliance culture as an important part of the trust company's corporate culture

Compliance Department Responsibilities:

1. Assist leaders in building the company's compliance management system, formulate and revise the company's compliance manual and other compliance risk management rules and regulations;

2. Draft annual compliance management plan;

3. Proactively identify, assess, monitor and report compliance risks;

4. Responsible for the formulation of various specific compliance work programs, so that compliance work can be carried out smoothly;

5. Draft compliance report;

6. Participate in the development of new products, identify and evaluate compliance risks, and provide compliance support;

7. Investigation and handling of violations and drafting of decisions on violations;

8, sort out the company's internal control process, and propose relevant improvements;

9. Review the company's internal management system and business procedures, and provide recommendations for compliance improvement;

10. Carry out anti-money laundering related work;

11. Organize compliance training and provide compliance consulting to company employees;

12. Track the changes and developments of laws and regulations, regulatory requirements and industry self-discipline rules, and put forward suggestions to formulate or modify the internal rules and regulations of the company according to its relevant requirements.

13.Other tasks assigned by the leader and other related assistance