Regulatory Alerts2021-07-01
JFSA’s Approaches to Compliance Risk Management
The Japan Financial Services Agency (JFSA) issued this discussion paper outlining its supervisory approach to compliance risk management, moving away from checklist-based methods towards engagement and a risk-based framework. It emphasizes that financial institutions' management must lead compliance risk management as a core business function, fostering a sound corporate culture and robust internal controls. The paper requires a risk-based approach to identify, assess, and mitigate a wide range of risks, including those from new products and cross-border activities, with the JFSA facilitating dialogues to improve practices rather than enforcing a checklist.
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