The Bank of Russia works out Concept of uniform internal controls for NFOs

The Bank of Russia suggests that the system of internal controls of non-bank financial organisations (NFOs) should be based on uniform principles. They are listed in a draft Concept worked out by the regulator.

The internal control systems (ICS) to be established in each NFO will allow them to better assess their business efficiency and performance, monitor compliance with regulations, reliability, completeness and timeliness of external and internal reporting. These systems are also designed to prevent NFOs’ engagement in illegal activities, including legalisation (laundering) of criminally obtained incomes and financing of terrorism, and to mitigate corruption in their activity.

At the same time, NFOs may implement certain provisions of the Concept based on the specifics and scale of their activity, ownership structure and risks assumed.

At the moment, the financial market does not dispose uniform rules for internal controls. The Concept worked out by the regulator is based on the best international practices and ICS principles of Russian credit institutions.

In future, the Bank of Russia intends to improve regulations related to establishing and functioning of the internal control system for NFOs. The regulator believes that it will ensure a fair competitive environment based on business integrity and transparency in the NFO market.