On Jun. 14, NGR SEC directed CMOs on enterprise risk management.
NGR SEC instructed all Capital Market Operators (CMOs) to implement an Enterprise Risk Management (ERM) framework that conforms to international standards.
Risk Management Standards
Standards refers to the Committee of Sponsoring Organizations of the Treadway Commission (COSO), ISO (ISO 31000), FATF Recommendations, amongst others.
NGR SEC state that adoption of comprehensive risk management practices is imperative in minimizing systemic impact and safeguarding stakeholders' interests.
Requirements for ERM Framework
ERM framework will be developed considering an entity's operational structure, business activities, clients’ demography, products and services, and delivery.
This includes risk governance structure with clear roles and responsibilities, including the formation of a risk management committee, as well as systematic processes.
Specifically for identifying, analyzing, and prioritizing risks that may impact the organization's objectives, and strategies to manage and mitigate identified risks.
Such as risk appetite and tolerance statements, monitoring of risk factors and regular reporting to senior management and board of directors, and risk awareness programs.
NGR SEC's directive aims to strengthen implementation of Risk-Based Supervision.
Includes Anti-Money Laundering (AML)/Countering the Financing of Terrorism (CFT)/Countering Proliferation Financing (CPF) measures in the capital market.
Effectiveness
All CMOs are required to submit a Board-approved risk management policy (selectable and searchable PDF format) on or before Sep. 30, 2024 via NGR SEC's email.
