SCA presents new requirements for internal audit reports at securities brokerages

The Securities and Commodities Authority (SCA), the regulator responsible for the oversight of securities brokerages in the United Arab Emirates, has issued a circular concerning the internal audit reporting for securities brokerage companies.

The circular introduces new, tighter requirements for internal reports at such companies. Under the new rules, which come into force in the beginning of 2016, internal auditors at UAE-based securities brokerages will be obliged to prepare and keep quarterly periodic reports and submit them to the SCA upon request.

The new report form includes a part about ensuring compliance with the rules and regulations and another part about monitoring and classifying different corporate risks.

Abdullah Al Turifi, CEO of SCA, said that the measures aim to enhance supervision of companies working in the securities field, promote and bolster self-regulation at securities brokerage companies by raising the effectiveness of the work of internal auditors there, as well as to take preventive and corrective measures against potential corporate risk.

The circular, sent to brokerage companies, covers implementation mechanism and procedures as follows:

  • Adherence of internal auditors to the reporting form attached to the circular.
  • Adherence of internal auditors to prepare and keep quarterly periodic reports and submit them to SCA upon request.

The latest set of requirements is introduced shortly after the SCA ordered all UAE-based securities and commodities brokerage companies to work on activating electronic connection with the Anti-Money Laundering and Suspicious Cases Unit of the Central Bank of the UAE (CBUAE). The latter marks an effort to bolster AML mechanisms.

To view the official announcement from the SCA on the new reporting requirements, click here.

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