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The Qatar Financial Centre Regulatory Authority (QFCRA) is proposing amendments to the Governance and Controlled Functions Rules 2020 (CTRL).
Seeking public comments on the proposed Governance and Controlled Functions (Amendment) Rules 2024, the QFCRA said the proposals support its commitment to the maintenance of high international regulatory standards for financial services, and the continued development of the QFC as a leading financial and business centre in the Middle East.
The public comments can be made until July 29.
The amendments particularly pertains to Category B firm establishing one or more board committees; and requires Category A firms (and other firms at the QFCRA's discretion) to ensure material outsourcing arrangements include the right of the QFCRA to conduct onsite visits of the service provider.
Under CTRL, banks and insurers that are incorporated under the QFC Companies Regulations are Category A firms; all other firms incorporated in the QFC are deemed to be Category B.
Category A firms are required to meet additional governance requirements, including the board’s size and composition, as well as mandated board committees.
While the QFCRA has the discretion to direct a Category B firm to meet higher governance standards in relation to the board’s size and composition, this does not extend to board committees.
"The QFCRA therefore proposes to have the discretion to direct a Category B firm to establish one or more of the mandatory Category A board committees," the draft said.
The amendments require Category A firms to include the right of the QFCRA to conduct on-site visits to service providers in any material outsourcing arrangement they enter into, in recognition of their heightened prudential risks; and have the discretion to require this right be included in any material outsourcing arrangement entered into by a Category B firm.
"This would be assessed on a case-by-case basis and would only be required where the arrangement gives rise to heightened supervisory risks," it said.
This assessment would normally occur during the 30-business day notification period that firms must provide the QFCRA prior to amending or entering into an arrangement, although the QFCRA may, if it thought it is necessary or appropriate to do so, give the direction at a later time.
To avoid disrupting current arrangements, material outsourcing arrangements in force at the time the new rules commence will be required to ensure on-site visitation rights for the QFCRA are included no later than 12 months from commencement.
