Chapter 2 - Independence of the Compliance Function

Question 1

Which international guideline states that the compliance function should be independent?

Answer 1

BCBS - Principle 5

Question 2

What does BCBS Principle 5 state?

Answer 2

The compliance function should be independent.

Question 3

What 4 elements should be in place to maintain the independence of the compliance department?

Answer 3

1. Written formal status as a department
2. Group compliance officer/ Head of Compliance
3. Compliance responsibilities should not involve conflicts of interest.
4. Access to personnel and information.

Question 4

In which circumstances does the BCBS allow compliance personnel to be involved in non-compliance tasks?

Answer 4

In smaller banks or businesses where conflicts of interests are avoided.

Question 5

What is the first line of defence?

Answer 5

Operational controls - QA.

Question 6

What is the second line of defence?

Answer 6

Compliance - policy and advice and the monitoring team.

Question 7

What is the third line of defence?

Answer 7

Internal audit