Business Continuity International 

Regulatory Compliance

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Business Continuity can help guide you through the regulatory compliance mêlée by following a structured set of initiatives and guidelines that will not only ensure that your company will meets the regulatory expectations  but also ensure life safety of your companies business its assets and employees.

US regulators issue definitive guidance on business continuity for financial sector

Final version of ‘Sound practices to strengthen the resilience of the US financial system’ published.

The Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission have issued the final version of ‘Sound practices to strengthen the resilience of the US financial system’.

This is an updated version of a draft paper that was issued in September 2002 for consultation. The agencies have incorporated many of the suggestions that were made and the final paper, which applies most directly to the clearing and settlement activities of a limited number of financial institutions, provides more flexibility to firms in managing geographic dispersion of backup facilities and staffing arrangements than was in the much more prescriptive draft version. The final paper also takes into account other considerations relevant to cost-effective implementation of sound business continuity practices.

THE BASEL II CAPITAL ACCORD

INTRODUCTION
The Basel Committee on Banking Supervision was established by the central bank Governors of the G10 (Group of Ten) countries at the end of 1974. In 1988, the Basel Committee decided to introduce a capital measurement system, normally referred to as the Basel Capital Accord. This forced banks in G10 member countries to implement a credit risk measurement framework, an approach that has also been taken up in virtually all other countries.

In June 1999, the Basel Committee decided that the 1988 Accord needed replacing with an updated version. This is currently under development and is commonly called the Second Basel Accord, or Basel II. This consists of 'three pillars':

* Minimum capital requirements, which will update and refine the rules set out in the 1988 Accord;
* Supervisory review of an institution's internal assessment process and capital adequacy; and
* Effective use of disclosure to strengthen market discipline as a complement to supervisory efforts.

The initial Basel Capital Accord only took financial risks into account; Basel II will ensure that banks evaluate and measure other forms of risk, including operational risk. Banks will have to make capital provision to effectively act as a contingency fund, to cover the direct and indirect losses that emergent operational risks could cause.

The Basel Committee intends to finalise the new Capital Accord in the fourth quarter of 2003, allowing for implementation of the new framework in each G10 country by the end of 2006. (Source: Basel Committee)

THE TURNBULL REPORT

The Turnbull Report is the abbreviated name given to guidance provided by The Institute of Chartered Accountants in England and Wales to enable UK companies to implement the internal controls required by the Combined Code on Corporate Governance. The full title of the Turnbull Report is 'Internal Control: Guidance for Directors on the Combined Code.' The guidance is supported and endorsed by the London Stock Exchange.

According to ICAEW the guidance "indicates the company's internal control system should:
* be embedded within its operations and not be treated as a separate exercise;
* be able to respond to changing risks within and outside the company; and
* enable each company to apply it in an appropriate manner related to its key risks."

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