Your compliance framework should ensure your business consistently meets legal, regulatory, and ethical obligations while reducing risk and enabling confident decision-making.
At a minimum, it should:
1. Identify and interpret obligations
You need a clear, current register of the laws, regulations, and standards that apply to your business, translated into practical requirements your team can follow.
2. Assign accountability
Every obligation should have a defined owner. This removes ambiguity and ensures responsibility for implementation, monitoring, and reporting.
3. Embed controls and procedures
Your framework should turn obligations into day-to-day actions through documented policies, processes, and controls that staff actually use.
4. Monitor and test effectiveness
You should regularly review whether controls are working in practice, not just on paper, using audits, reviews, and data-driven checks.
5. Detect and respond to issues
A strong framework includes mechanisms to identify breaches early, escalate them appropriately, and implement corrective actions quickly.
6. Maintain evidence and records
You need reliable documentation to demonstrate compliance to regulators, auditors, and stakeholders at any point in time.
7. Support training and awareness
Your team should understand their obligations and how to meet them, with ongoing education tailored to their roles.
8. Enable continuous improvement
Your framework should evolve as regulations change, risks emerge, and your business grows, rather than remaining static.
Key insight: A compliance framework should operationalise obligations into accountable, testable, and continuously improving business practices. So, regardless of the “nature, scale and complexity” of your business, a Licensee should have in place arrangements that:
- ensure your compliance with your licence obligations and the financial services laws; and
- addresses the specific compliance risks of your business, (especially those that may materially affect consumers); and
- demonstrates that:
- your representatives understand their compliance obligations;
- you monitor compliance with obligations;
- compliance breaches are addressed and reported.
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