Basic standard for three lines of internal control in NPFs
The internal control in non-governmental pension funds (NPFs) covers all employees and organise them in a single three-line system, which defines roles for core structural units, management bodies and officials in the fund. This model is set forth by the basic standard approved by the Bank of Russia.
The basic standard draws upon best market practices and aims to raise the efficiency of NPFs and improve the quality of their services. The internal control helps to timely identify and eliminate mistakes in NPF operations, promptly manage risks, monitor compliance with legislative requirements and Bank of Russia regulations, as well as basic standards.
The document outlines the procedure for systemic monitoring and assessing the effectiveness of the internal control system. One of the key principles incorporated in the standard is the continuity of internal control processes.
The basic standard takes effect in six months, i.e. on 23 May 2022. During this period, funds will be able to implement its provisions in their activities and adjust internal processes. Self-regulatory organisations will use this time to get prepared for conducting audits of funds’ compliance with the standard.