Page 88 - Annual Report 2017

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Following consultation feedback received from industry and upon The Regulatory Authority developed the protected reporting
further market analysis, in October 2017, the Regulatory Author- framework in accordance with best practice international stan-
ity issued Consultation Paper 2017/02 which proposed modified dards, including those set out by the Organisation for Economic
liquidity requirements that appropriately reflect the local market Co-operation and Development. The Regulatory Authority expects
conditions in which QFC banks operate. to implement the protected reporting framework for authorised
firms in 2018.
Both sets of consultations envisage a revised liquidity risk framework
where QFC banks fall into one of the two categories:

• Category 1 banks that are subject to the BCBS and IFSB The Islamic Financial Services Board (IFSB), serves
frameworks consulted on in Consultation Paper 2017/01; and as an international standard-setting body of regu-
latory and supervisory agencies that have vested
• Category 2 banks that are subject to modified liquidity
requirements as set out in Consultation Paper 2017/02. interest in ensuring the soundness and stability
of the Islamic financial services industry. The IFSB
The Regulatory Authority expects to implement the revised liquidity
risk framework for QFC banks in 2018. promotes the development of a prudent and trans-
parent Islamic financial services industry through
introducing new, or adapting existing international
Protected reporting: “whistle-blowing” standards consistent with Sharî’ah principles, and
framework recommend them for adoption.

In 2017, the Regulatory Authority commenced work to enhance
the existing QFC whistle-blowing framework which is operated
under the QFC Employment Regulations. The Regulatory Author-
ity believes that strengthening the existing QFC whistle-blowing
framework through the introduction of upgraded requirements
for authorised firms will assist both authorised firms and the Reg-
ulatory Authority in the early identification of risks and potential
wrongdoing.
In October 2017, Consultation Paper 2017/03 was published and
set out a proposed legislative framework for making confidential
reports about alleged wrongdoing by QFC authorised firms or
persons connected with such firms. The proposed Rules provide
appropriate mechanisms for confidentiality, anonymity and pro-
tection for persons making reports. It is anticipated that anonymous
reporting mechanisms will help foster a climate whereby employees
are more likely to report or seek guidance regarding potential or
actual wrongdoing without fear of retaliation from their employer,
such as immediate termination or ongoing harassment on the job.