Page 71 - Annual Report 2020

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Policy and Legislative Counsel
Regulatory policy initiatives
A key focus of work for the Policy and Legislative
Counsel departments of the Regulatory Authority in
2020 was to finalise rules to strengthen its corporate
governance and prudential framework with the
upgrading of corporate governance and operational
risk rule requirements for authorised firms.
The departments also finalised rules for the introduction
of a representative office framework and a package of
miscellaneous amendments to various rulebooks.
Corporate governance
In July 2020, the Regulatory Authority introduced
upgraded corporate governance rules for authorised
firms. The rules were developed to consider relevant
developments in international best practice and to
appropriately align with the corporate governance
frameworks of the Qatar Central Bank and the Qatar
Financial Markets Authority. The rules introduced a new
overarching transparency principle requiring the boards
of authorised firms to provide stakeholders with enough
information to allow them to assess the effectiveness
of the board and senior management in managing
the firm. The rules also strengthened requirements
around board composition and board committees,
as well as accountability and risk management
practices at board and senior management level.
Prudential banking framework
The Regulatory Authority has continued its policy work
on the implementation of the Basel III framework as set
out in the standards published by the Basel Committee
on Banking Supervision (BCBS) and the Islamic Financial
Services Board (IFSB). The Basel framework includes
a range of prudential banking reforms, which aim to
strengthen bank capital requirements to address, among
other risks, the operational risks that are inherent in all
banking products, activities, processes, and systems.
Operational risk
Following an extensive review and consultation, the
Regulatory Authority introduced upgraded operational
risk requirements in July 2020. The rules strengthened
the existing qualitative operational risk management
framework and introduced new quantitative operational
risk requirements that are both proportionate and
aligned with the latest BCBS and IFSB standards. The
framework requires authorised firms to implement a
robust operational risk management framework that
considers their risk appetite, risk profile and market
and macroeconomic conditions. This includes prudent
policies and processes to identify, assess, evaluate,
monitor, report and control or mitigate operational
risk. The new rules were introduced in the updated
Banking Business Prudential Rules 2014 and the
Islamic Banking Business Prudential Rules 2015.
QF CR A ANNU AL REP OR T 2020
New Representative Office framework International and domestic
co-operation and engagement
In October 2020, the Regulatory Authority introduced
new rules for a Representative Office framework Since its establishment, the Regulatory Authority
that permits financial services firms to undertake a has entered into two multilateral agreements,
limited range of activities in respect of services or 42 bilateral Memoranda of Understanding,
products offered by its head office or corporate group. and 24 Alternative Investment Fund Managers
The activities of a Representative Office may include Memoranda of Understanding with a broad
providing information to prospective customers range of international jurisdictions.
of the head office, carrying out market research,
assessing business trends and opportunities for the
head office, acting as a channel of communication
to the head office and generic marketing.
Miscellaneous rule amendments
In October 2020, the Regulatory Authority introduced
a package of miscellaneous amendments to various
rulebooks. Within the package of amendments, changes
were introduced through the Collective Investment
Schemes Rules 2010 (COLL) in respect of Real Estate
Investment Trusts (REITs). Other changes were
introduced to the General Rules 2006 (GENE) relating
to the regulation of captive finance and providing leases
and clarification of the application of the ‘late fees’
framework to late submissions of regulatory reports.
T ABLE OF C ONTENT S