In today’s world, there is huge stress given on the Compliance of rules and regulations all over the world and following the rules and regulations in the Middle East is crucial. Without following these regulations, the company can face huge penalties, and there is a chance that they might have to shut down. It is also to be kept in mind that each of the emirates in the United Arab Emirates has its own rules, so it is very important for businesses to stay updated with the present rules and regulations of the country.
Following the rules and regulations which have been established by a jurisdiction has become very important, and if a company does not want any hassle in the future, they should avail Regulatory Compliance Services from a reputed firm.
What do you mean by Regulatory Compliance?
There are many different parts or departments of a business. Each of these departments needs to conduct their activities in tandem with each other so that they can together be more productive and provide the best possible results. Each of the departments also has to be careful of understanding all the requirements of the jurisdiction. As there are many different places where a company can be set up, such as Free Zones, Offshore, or mainland, and each of them has different rules and regulations.
Regulatory Compliance can be understood as understanding the rules and regulations of jurisdiction and following them. As said before, there are many different jurisdictions and governing authorities which make a rule in the different free zones in the United Arab Emirates. The Government of the UAE makes changes to its rules and regulations frequently, and this creates a need for such services in the country.
What are the Roles and Responsibilities of Regulatory Compliance?
To supervise the rules and regulations set by an organization, the Regulatory Compliance Management performs three lines of defence. Let’s have a look at them.
1st line of Defense | Management Assurance
- Assist in setting and executing strategies
- Provides direction and guidance
- Promotes a strong risk-culture and develop sustainable risk-return thinking
- Develops strong compliance culture
2nd line of Defense | Risk Management, Legal and Compliance
- Develop a formal, robust framework with organizational policies
- Interpret the regulatory compliances requirements
- Regular monitoring of risk, and legal compliance
- Keep a check on the 1st line of defense
3rd line of Defense | Internal Audit and Other Independent Assurance Providers
- Overall adequacy and effectiveness of governance
- Keep a check on the risk management and internal controls
- Provide assurance on the effectiveness of mitigation plans
- Manage organizational risks
Why Is Regulatory Compliance Important?
Since regulatory compliance contributes to maintaining a healthy environment, its importance can be understood as we go through the following points:
- Business relationships are healthy when a framework is followed
- Regulatory compliance helps to build strategies regarding risk management
- It improves the overall health of a business entity
- It strengthens the litigation process
The aforementioned benefits are crucial for any business. It strengthens the core foundation as well as streamline your business functions. Another aspect you must be wondering is what if you don’t adhere to set regulatory compliance in your organization. Well, let’s have a look at the answer to your question.
Why is Regulatory Compliance required by a Business?
A lack of such Compliance can lead to many unfortunate situations such as fines and penalties and may ultimately lead to the liquidation of the company. All the companies must be compliant with all the rules and regulations of the company. There are many different reasons due to which it is very crucial for a business to be compliant with the different rules and regulations. These are:
- It increases the goodwill of the company
- It enables the cooperation of the authorities or the jurisdiction.
- Following regulatory Compliance will help avoid punishments and penalties altogether.
- Regulatory Compliance form a very big part of Risk management. Staying compliant will help the different businesses to avoid risk and be more profitable.
- Regulatory Compliance can provide new opportunities to companies in investment as well as for generating more finances which will help the businesses to become more profitable.
There are many more reasons which make Regulatory Compliance very important services for a company to have. To know more about the importance of Regulatory Compliance for a business, you can read out the blog titled "9 Reasons why you need Regulatory Compliance."
What is the result of Non-Compliance of Rules and Regulations by a Business?
There are a number of rules and regulations which should be followed by a business so that they do not face any problem in the future of the business. Here are the different results which a business can face if it does not comply with the rules and regulations as mentioned by the relevant authorities. Some of the results which could be faced by a business are:
- First and foremost, the company will have to face a lot of penalties, and in case the businesses do not comply with the given rules and regulations.
- The damage to the reputation of a company caused due to non-compliance is huge. Both the brand value as well as the complete reputation of the company as well as any entities associated with the company.
- The company might have to conduct extra audits, which may result in a further loss in productivity as well as profitability.
There are many other consequences which a company can be felt due to non-compliance with the relevant rules and regulations. Noncompliance can be a very big problem, and to stay up to date on all the facets of business, the management should avail assistance from reputed Auditing and Accounting Firm. If you are planning to step ahead, it is recommended to have a word with a consultant who can help you in establishing the service in your firm. We at JAXA are here to provide you the same. Our experts will help you to necessitate the regulatory compliance services. Contact us to initiate the next steps. We’d be glad to assist you.