Compliance Management Frameworks

As a document, a Compliance Management Framework (CMF) is a written record that covers an organisation’s compliance strategy in depth. It outlines how an organisation identifies, manages, and monitors its overall compliance obligations. As a strategic document, a CMF reflects extensive planning on compliance strategy. It is not only a point of reference on an organisation’s compliance structure for the Board, stakeholders, auditors, and regulators but also a written statement on how compliance obligations are handled broadly and how the compliance strategy is implemented.

At its core, a CMF can be a key component of an integrated Governance, Risk and Compliance (GRC) approach to effective corporate governance, risk management and compliance with different laws and regulations. This approach aims to create a unified structure to assist an organisation in responding to new or emerging risks and compliance in an evolving regulatory environment.

The essential elements of an effective CMF include:

• A written statement on compliance governance structure outlining how compliance responsibilities are managed.
• An overview of policies, procedures, and processes that help manage different categories of compliance risks (money laundering and terrorism financing (ML/TF) risks, privacy law-related risks, financial licensing risks, etc).
• A clear explanation of how your compliance risk management is linked to your overall Risk Management Framework.

• Listing key compliance policies and (where appropriate) procedures to address compliance with different regulatory requirements.
• A clear explanation of how it is linked to your obligations registers, material risk registers, compliance calendar and checklists, etc.
• The Board’s approach to identifying and managing compliance risks
• The Board’s oversight over the compliance process
• An overview of:

• The compliance management process, compliance monitoring mechanisms
• Any compliance assurance programs and audit functions
• Compliance monitoring programs (CMP)
• Compliance monitoring plans, calendars and checklists

• An overview of Compliance reporting processes
• Clearly defined reporting structures explaining the relationships between the Board, compliance and senior managers, including:

• The role and responsibilities of compliance
• The role and responsibilities of the Board and different delegates helping with the board oversight of compliance function (usually a compliance committee or risk and compliance committee, etc.)
• The role and responsibilities of those with managerial responsibility for the compliance
•  Employee roles and responsibilities in fostering a strong compliance culture.

• A review process to ensure that the overall strategic approach to compliance risks remains relevant.

 

The Essential Features of a good CMP are:

• Clear, Accessible Structure: A good CMF is well-organised and easy to navigate, enabling users across the organisation to quickly understand and locate relevant compliance information.
• Depth and Detail: It includes sufficient depth to cover all compliance areas thoroughly, from policies to procedures, ensuring nothing is left vague or open to misinterpretation. Although not an operational document, a CMF outlines the organisation’s compliance management systems and processes. It provides sufficient detail for stakeholders to understand how the compliance strategy is implemented.
• Alignment with Compliance Strategy: A well-designed CMF is built around the organisation’s specific risks, regulatory obligations, and industry standards. It considers its business goals, regulatory environment and expectations, size, specific compliance risks associated with products offered, etc.
• Adaptability to Change: A good CMF is designed with flexibility to adjust to evolving regulations, emerging risks, and business growth, preventing it from becoming outdated.
• Consistency in Application: Effective CMFs ensure consistent boundaries between your first, second and third lines of defence.

 

Our Solutions

We design and implement Compliance Management Frameworks (CMFs) that are tailored to meet the specific compliance needs of your organisation, maintaining effective compliance management for your particular situation. Our approach focuses on the efficiency and effectiveness of your compliance strategy in terms of your ability to implement and adapt it in the long term. It is a poor strategy to commit to something only to understand that compliance becomes an absolute blocker or that your compliance strategy is not achievable at the implementation level. This is where our compliance management experience becomes an asset.

Our Compliance Frameworks are tailored to meet your compliance needs in a commercially feasible manner with regard to your specific circumstances, including:

• Your commercial objectives
• Products you offer
• The size of your business
• The available technology
• Your risk appetite
• Your governance structure
• Client demographics
• Your countries of operation, their applicable laws, regulations, licensing and compliance requirements

 

 

 

We address compliance obligations in the following areas:

• AML/CTF
• Fraud Prevention
• Sanctions Compliance
• Corporate governance
• Data Privacy
• Compliance with Financial Licensing requirements
• Operational Oversight
• Audit and Assurance
• Market Integrity & Transparency
• Resource Management
• Event-based and Periodic Reporting
• Product and Service Management
• Transactional Monitoring
• Operational processes, including but not limited to:

• Product promotion
• Customer onboarding
• Customer communication
• Transaction Monitoring
• Internal Communications
• Reporting
• Incident management
• Third-party risk management
• Recordkeeping
• Conflict of interest management

 

Our CMPs solutions cover:

• First Line Compliance: We help you with frontline compliance, where teams handle daily compliance tasks directly, using practical tools to track obligations and address compliance risks as they arise.
• Second Line Compliance: We help you set up monitoring functions that review and guide first-line efforts. This includes risk assessments, setting up internal controls, and developing compliance monitoring programs and other policies to manage compliance consistently.
• Third Line Compliance: We provide independent reviews through audit functions and evaluations, helping to assess and refine your compliance approach. This layer focuses on spotting gaps and meeting regulatory requirements effectively.
• Training: We help you with compliance training programs designed to ensure that employees across all levels understand their compliance responsibilities. Training covers areas such as recognising risks, understanding compliance policies and procedures, and staying updated on regulatory changes.
• Management of Specific Compliance Areas, including but not limited to:

1. • AML/CFT (Anti-Money Laundering and Countering Financing of Terrorism): We help you with managing AML/CFT obligations, including monitoring, reporting, and reducing risks related to financial crime.
   • Financial Licensing and Authorisation Requirements: We guide you in meeting various licensing and authorisation needs for financial services, helping you stay in line with relevant legal requirements and regulatory frameworks.
   • Data Protection Compliance: We assist in managing data protection obligations, including compliance with global privacy laws such as the GDPR, CCPA, and regional privacy frameworks. This includes data breach reporting, managing data subject access requests, and implementing privacy-by-design principles.
   • CRS and FATCA Compliance Support: We assist with operationalising CRS and FATCA obligations, including client classification, documentation processes, data collection and reporting, and monitoring changes to ensure frameworks remain aligned with regulatory updates.

• Compliance Calendars & Checklists: We develop detailed compliance calendars to schedule and track compliance activities and tasks, ensuring no deadlines are missed.
• Compliance Obligations Registers: We create and maintain a comprehensive register of all applicable compliance obligations specific to your industry and jurisdiction.
• Internal Reporting Structures: We can help you establish clear lines of communication and reporting within your organisation to facilitate effective compliance tracking and issue escalation.
• Controls testing methodologies: Covering controls evaluation, effectiveness rating and testing methodologies for different departments.
• Control Testing and Monitoring: Providing clear guidelines for regular testing of internal controls, assessing their effectiveness, and relevant follow-up actions. This includes:

• AML/CTF Controls: customer due diligence, transaction monitoring, ongoing due diligence, record keeping, transactional reporting, enhanced due diligence measures, suspicious matter and activity reporting, ML/TF red flags and indicators effectiveness, etc.
•  Fraud Prevention
•  Banking Controls
•  Marketing
•  Sales
•  Governance
•  Risk Management
•  ISO controls

• Policy and core documents review: Oversight mechanisms to ensure that these are updated when required.
• External Reporting Oversight: Oversight mechanisms covering event based and periodic reporting to ensure that relevant matters are reported to your regulators.
• Compliance Training Oversight: Oversight mechanisms to ensure that training is conducted and compliance training manuals and programs remain relevant.
• Incident Reporting Oversight: Oversight mechanisms to test your incidents management and issue management protocols.
• Continuous Compliance Tracking: Compliance actions are required when it comes to regulatory change management, changes in your risk ratings and risk assessment methodologies, roles and responsibilities in compliance management, internal and external audit outcomes, including compliance gap analysis findings.

 

Types of Entities We Help

We deliver compliance monitoring programs for a wide range of entities, including:

• Non-bank deposit takers and non-bank lenders, including neo-banks, building societies, and savings and loan associations
• Consumer credit providers, credit unions, finance companies and corporate finance providers
• Investment bankers, investment firms, and fund managers,
• Derivatives issuers, derivatives platforms and traders
• Financial advisers, investment advisers, and wealth managers
• Brokers, including forex brokers
• Custodial or depository services providers and licensed trustees
• P2P lending platforms and crowdfunding services
• Fintech and InsureTech companies
• Insurance providers, including life and maritime insurance providers
• Online casinos and gambling platforms
• Currency exchange providers, e-money issuers, money remitters, and money transmitters
• Company and trust formation specialists, real estate businesses, audit firms, law firms and professionals

 

Our compliance monitoring programs work well for financial institutions and financial service providers based on the following:

• Australia
• United States
• United Kingdom
• Singapore
  Hong Kong
• New Zealand
• European Union
• Offshore formation centres such as Dubai, the Cayman Islands, Bermuda, Malta, Seychelles, Vanuatu, Panama, Belize, the British Virgin Islands, etc.

 

Compliance Management Framework Design

We focus on the effectiveness and efficiency of your CMF to make sure it is fit for purpose in your circumstances, aligning compliance with your business strategy, objectives, risk appetite and resources. Our focus areas include:

• Compliance Oversight Processes: Setting up processes for ongoing oversight of compliance activities, ensuring compliance responsibilities are consistently met.
• Internal Controls Implementation: Assisting in the implementation of internal controls that support compliance objectives and adherence to regulatory requirements.
• Compliance Reporting Mechanisms: Establishing clear and efficient mechanisms for reporting compliance findings to relevant stakeholders.
• Compliance Policy Updates: Keeping your compliance policies up-to-date with the latest regulatory changes and best practices.
• Regulatory Change Management: Monitoring changes in regulations and adjusting compliance activities accordingly to maintain compliance.
• Compliance Monitoring Tools: Utilising specialised tools and software to enhance the efficiency and effectiveness of compliance monitoring activities.
• Technology Solutions for Compliance Management: Integrating technology solutions, including RegTech applications, to streamline compliance processes.
• Automated Compliance Solutions: Implementing automated systems to reduce manual workload and improve accuracy in compliance monitoring.
• Issue Management and Corrective Action Plans: Identifying compliance issues promptly and developing corrective action plans to address and resolve them.
• Compliance Training Oversight: Incorporating training programs to educate staff on compliance responsibilities and promote a culture of compliance.
• Evaluating Compliance Program Effectiveness: Regularly assessing the effectiveness of the compliance monitoring program and making improvements as needed.
• Aligning Compliance with Business Strategy: Ensuring that compliance activities support and enhance your overall business objectives.
• Compliance Best Practices: Incorporating industry best practices into your compliance monitoring program to enhance its effectiveness.
• Compliance Management Systems: Assisting in the development or enhancement of compliance management systems to support your compliance activities.

 

Compliance Management Framework and RegTech Integration

Our focus areas for this service include:

• Needs Assessment
• Compliance Technology Selection: Tailored to your budget, operations, and compliance obligations
• Implementation and customisation assistance across the business
• Assisting with testing to validate functionality, usability, and integration with operational, risk management, and compliance structures
• Streamlining internal documentation, including policies, procedures, workflows, and process maps, to accommodate the technology selection

 

Compliance Management Framework Implementation

We assist businesses with compliance management framework rollout by:

• Collaborating with risk and compliance teams to align CMF implementation with organisational goals
• Supporting teams across various departments in understanding and executing CMF-related responsibilities
• Engaging with management to report on CMF implementation progress and address various challenges
• Helping the business set up necessary compliance committees and functions to oversee compliance across the business
• Setting up a compliance assurance program, if applicable
• Drafting and implementing a tailored compliance monitoring program
• Setting up a compliance monitoring calendar and checklist
• Drafting necessary supporting documentation, including manuals, guidelines, procedures, and protocols
• Developing internal controls throughout the business, helping to back up RMF documents with real control points
• Developing control testing methodologies aligned with your risk rating
• Leading compliance control testing throughout the business
• Developing internal compliance reporting lines across the business
• Developing effective reporting processes for the risk function and management to determine whether compliance risks are managed in accordance with your risk appetite and risk statement, including reporting on control testing, their effectiveness, gaps, etc.

 

Compliance Management Framework Enhancement

We offer CMF enhancements to increase the overall effectiveness of your compliance efforts, reflecting on:

• New compliance requirements, changes to the existing regulatory regime, and adaptations to regulatory compliance guidance
• Business growth and expansion
• Changes in risk ratings, risk appetite, identified new risks, changes in risk profiles
• Auditors' and regulators' findings, including identified deficiencies and breaches
• Internally identified areas of improvement and gaps
• Updates in your compliance policy
• Results of previous internal controls testing
• Introduction of new products
• Other triggering events

 

Compliance Management Framework Review

Regular CMF reviews can help your compliance function and senior management manage compliance effectively. We offer a thorough CMP review service to assess its effectiveness and fitness for purpose. Our focus areas include identifying:

• Any gaps
• Points of improvement
• Required adjustments related to changes in your resources and operations
• Required adjustments related to the introduction of new products, expansion to new jurisdictions, and more

We offer this service either as:

• A standalone solution
• As part of our compliance advisory solution. For more information about coverage, please visit our Compliance Advisory Solution page.
• As part of our second-line compliance management solution. For more information about coverage, please visit our Compliance Management Solution page.

 

Compliance Management Framework for SMEs and Startups

SME regulatory solutions are about keeping you compliant right here and right now with the resources you have available, while helping to ensure that adjusting your CMF to future growth does not become a painful exercise and a business development blocker.

This is why, as part of your startup regulatory support, we offer scalable frameworks for SMEs to help you establish foundational compliance practices that align with regulatory requirements and industry standards, allowing adjustment for future growth and continuous improvement as your business develops.

 

Compliance Management Frameworks for Company Groups

Having spent years helping company groups with compliance management and assurance across multiple regulated products and jurisdictions, we focus on CMFs that address the complexities of multinational operations, multi-entity governance and drive compliance management efficiency. Our focus includes, but is not limited to:

• Streamlining Operations: Simplifying compliance efforts without compromising thoroughness and avoiding unnecessary burdens when addressing regional differences.
• Achieving Comprehensive Compliance: Meeting regulatory requirements across all organisational levels, fostering a culture of compliance driven by senior management.
• Aligning Corporate Governance: Ensuring your compliance practices integrate seamlessly with your corporate governance framework.
• Leveraging Technology-Driven Solutions: Incorporating compliance technology to centralise reporting, automate workflows, and enhance visibility across jurisdictions.
• Strengthening Compliance Monitoring Programs: Implementing thorough control testing, compliance calendars, checklists, traceability, and results reporting to monitor compliance effectively.
• Enhancing Group Governance Management: Establishing clear governance structures and roles across entities to ensure accountability and alignment within company groups.
• Centralising Regulatory Solutions: Developing consistent regulatory processes and reporting mechanisms across jurisdictions to manage local compliance requirements effectively.
• Adapting to Change: Designing programs that evolve with regulatory updates, ensuring your compliance practices remain relevant and effective.

 

Compliance Management Framework for High-Risk Corporates

High-risk corporates face heightened regulatory scrutiny. With years of experience helping high-risk corporations structure their compliance efficiently, we develop CFMs that go into the necessary depth to help these businesses structure compliance oversight to a required level. Our focus includes, but is not limited to:

• Advanced Risk-Based Control Design
• Effective Compliance Monitoring Plans
• Control Identification Linked to In-Depth Process Mapping
• Independent Control Validation
• Risk-Weighted Compliance Oversight
• Effective Escalation Mechanisms
• Enhanced Traceability and Reporting
• In-Depth Compliance Reporting at Different Levels
• Crisis-Ready Compliance Management
• Control Ownership and Accountability
• Control Change Management
• Advanced Operational Resilience Controls

 

Compliance Management Framework in Context

In terms of overall compliance, a CMF should generally be supplemented by:

• Compliance Monitoring Program (CMP): A specific plan to assess adherence to regulations and internal policies. It includes activities like audits, reviews, and self-assessments to identify and address non-compliance issues. Please visit our CMP page for more information.
• Compliance Calendar: A schedule of compliance-related activities, deadlines, and review periods. It helps ensure timely task completion and provides a clear overview of the compliance workload. Please visit our Compliance Calendars page for more information.
• Compliance Checklist: A detailed list of items to be verified or completed to ensure compliance with a specific regulation or policy. It provides a structured approach to assessing compliance status and identifying areas for improvement.

It should also align with:

• Risk Management Framework: A comprehensive system of policies, procedures, and controls designed to identify, assess, mitigate, and monitor risks that could impact an organisation's objectives. Please visit our Risk Management Solutions page for more information.
• Compliance documents covering specific areas of compliance. For example, AML/CFT Compliance Programs, Data Retention policies, outsourcing policies, etc.

Also, on a broader scale, a CMP is often supplemented by:

• Compliance Assurance Program (CAP): A systematic approach to the independent evaluation of the organisation's compliance framework and controls’ effectiveness. It aims to provide reasonable assurance that the organisation is complying with relevant laws, regulations, and internal policies. We offer this service as part of our compliance assurance solutions. Please visit our CAP page for more information.