Other Sections

Supervision

The Registrar conducts ongoing supervision to ensure the safety and soundness of discount houses in order to promote confidence and safeguard the integrity of discount houses. The Registrar monitors the risk profile of discount houses as well as operational and compliance aspects to identify areas of elevated risk, non-compliance, and the adequacy of mitigating measures. Appropriate enforcement action is taken in the event of non-compliance and other adverse developments.

Ongoing supervision is conducted through off-site surveillance and on-site examinations. The supervisory approach is risk-based, which entails allocating supervisory resources to areas of high risk.

Off-site surveillance

Off-site surveillance involves monthly and quarterly review and analysis of statutory returns submitted by discount houses through Bank Supervision Application (BSA). The review enables the Registrar to periodically monitor conduct of business by the licensees and to ascertain financial soundness and regulatory compliance with prudential requirements.

On-site examination

On-site examination of discount houses involves:

  1. assessing the level of risks inherent to discount houses;
  2. evaluating effectiveness of risk management system and internal controls in identification, measurement, monitoring, and controlling of risks inherent to the institution’s operations;
  3. determination of residual risks faced by discount houses; and
  4. assessing discount houses’ compliance with financial service laws.
The types of on-site examinations include:
  1. Routine examination: carried out for a discount house as per examination planning cycle which may be full scope - covering all risk areas or targeted on specific areas;
  2. Ad hoc: triggered by an adverse event within the institution or market; or
  3. Follow up: conducted to ascertain implementation of recommendations from a routine or ad hoc on-site examination.