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    WORKING REMOTELY? Compliance Challenges Facing ADGM Firms

    To return or not to return, that is the question…

    The working world as we know it has changed and working from home (WFH) is the new norm and likely to stay.

    As we adapt to the shifts in working patterns, businesses must pay careful attention to the changing dynamics of WFH and the associated risks for the unprepared business.

    The responsibility will fall on senior management to navigate through unchartered territory and a robust and prepared compliance department is vital to senior management in identifying and mitigating risk.

    Firms may need to increase their remote monitoring activities to address the increased risks of individuals engaging in non-compliant behaviours. The absence of compliance within close proximity makes it easier for such behaviours to arise.

    Here are some of the key issues that compliance need to consider:

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    Enhanced transaction monitoring & systems & controls

    • Enhanced transaction monitoring.
    • Increase the frequency of issuing compliance guidance and internal memos to ensure adherence to regulatory laws/rules and international best practices. Particular attention should be given to handling of confidential data remotely.
    • Adopting and enhancing process flows for transacting deals in a WFH scenario.
    • Engaging the services of expert outsourced providers to add a layer of additional supervision and increase the volume of communication and additional monitoring.
    • Where possible ensuring compliance teams are engaged by front, middle and back office on calls and remote meetings.
    • Remote lines used for transmission and execution of orders are being recorded and where recordings are not available, written accounts, minutes and record keeping from relevant teams are obtained.
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    General compliance monitoring

    • Enhance monitoring for personal account dealings, gifts and other incentives.
    • Increased due diligence for authenticating document attestations and certification.
    • Firms must ensure that staff are aware of their obligations and know how to properly handle and destroy sensitive documents and notes.
    • Particular care should be taken by staff sharing their home with other people or family particularly if they are employed by other financial services firms.
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    Cyber security risk

    • Working from home increases the prospect of cyber-attacks and cyber breaches. Firms must ensure staff are aware of risks and receive appropriate training. The Firms IT teams must ensure robust controls are in place.
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    Training, awareness & communication

    • As onsite training conducted by compliance departments are not going to be so frequent, firms need to adapt to introduce effective online trainings or pre-recorded sessions to deliver relevant compliance updates to staff.
    • Shorter, tailored and focused sessions may also be more effective.
    • Firms will need better systems or mechanisms to allow compliance to track completion of training remotely.
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    Senior management responsibilities

    • Senior managers must remain extra diligent and alert during these times. In a remote working situation, they need to be able to demonstrate how they have taken reasonable steps to ensure compliance with the relevant requirements.
    • There could be heightened risk, deviations from the usual control environment, key decisions made and changes in delegation arrangements or in the allocation of responsibilities during the pandemic, all of which should be clearly documented.
    • Increased focus on record-keeping, management information and remote monitoring would help senior managers to demonstrate how they have taken reasonable steps in line with any regulatory requirements.

    What should firms do immediately

    The above are just some are of the risk factors compliance departments need to be aware of. Firms should consider implementing a work from home policy and processes to ensure expectations are met. Laws, rules, temporary government directives and best practice must be clearly communicated to staff.

    The policies should include matters such as using and storing confidential information and data, regulating the use of personal devices for work purposes, communication monitoring; health and safety and rules related to performance management, working hours and reporting requirements.

    Compliance departments must enhance their monitoring and ensure the implementation of functional and flexible policies to facilitate WFH that will allow businesses to adapt with ease and to be prepared if further government restrictions are imposed.

    How can we help

    Our team consists of UK qualified lawyers and compliance officers that have assisted numerous ADGM entities in adapting their work from home policies. We have formulated detailed assessments and remedial plans to address all areas of weakness.

    We can help you assess, identify and mitigate your risks by providing a comprehensive review of your firms BCP and WFH arrangements and stress test them for robustness. We can help you plan and implement efficient policies, processes and SOPs to complement your existing compliance frame work.

    Should you require any assistance regarding your current processes, please contact our office on +971 4 320 7322 or email us at info@unitasadvisory.com and one of our consultants will be happy to assist.