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Lecture 4: Compliance with Regulations (Effective compliance program…
Lecture 4: Compliance with Regulations
Impact of Non-compliance
Financial
Monetary fines
Closure of biz unit
Increased capital requirements
Lowered share prices
Loss of biz opp
Personal
Personal liability
Mandatory restructuring
Lower or no bonuses
Impact on morale
Loss of personal license
Operational
Long duration and high cost in remediation effort
Delay in new initiatives
Higher risk of unintentional disclosure w use of ext resources in remediation efforts
Contracts rendered void
Regulatory
Higher scrutiny from regulators
More frequent inspection
Contribute to tougher an increased regulation
Increased cost for compliance
Compliance Approach
Start from the top
PDCA Cycle
Plan:
Discover relevant regulations applicable to org
Explore relevant standards & best practices
Derive obligations and best prac into req
Perform risk-based approach
Risk Assessment
Risk Treatment
Control Selection
Do:
Priorities compliance program
Build business case
Implement compliance program
Check:
Data gathering
Monitoring
Design reporting system
Act:
Identify deficiencies from prev phase deliverables
Establish correction plan
Implement Correction plan
Validate remediation completed successfully
Effective compliance program
Organisation policies and CoC
Clear roles and responsibility
Awareness training and specialised edu
Effective communicationo
Enforcement of policies and CoC
Consistent internal monitoring and auditing
3 Lines of defence
Business operations
Security and compliance
Audit
Responding to incidents
Implement Continuous improvement plan
Compliance Cycle
Ad-hoc
1 up and down graph
Periodically
Many big up and down graph
Near real-time compliance
Multiple small up and down graph