(f) the MLRO function; (g) the risk management function; (h) the compliance oversight function; (i) the internal audit function; (j) the actuarial function. Note There are 10 controlled functions and each of them is defined below in the order set out in this rule. Of these 10, 4 functions (compliance oversight, risk management, internal audit and actuarial functions) make up the internal control functions. 3.1.2 What is the non-executive governance function? The non-executive governance function is the function of holding a position on the governing body of an authorised firm that is a QFC entity but not having responsibility for the day-to-day direction of the firm’s affairs. Note QFC entity is defined in INAP as a company incorporated under the Companies Regulations 2005 or a limited liability partnership incorporated under the Limited Liability Partnership Regulations 2005. 3.1.3 What is the executive governance function? (1) The executive governance function for an authorised firm that is a QFC entity is the function of acting in the capacity of a director, other than a non-executive director, of the firm. (2) The executive governance function for an authorised firm that is a branch is the function of acting in the capacity of a director with responsibility for the firm’s business in or from the QFC. Note Branch is defined in INAP as a legal entity incorporated in a jurisdiction outside the QFC. A firm that is a branch is the local office in the QFC of a company or limited liability partnership incorporated in a jurisdiction outside the QFC.
 providing advice and support to the firm’s senior managers about compliance issues. Division 4.1.D Internal audit function 4.1.7 Which authorised firms must have internal audit function? (1) The senior management of a QFC insurer (other than a QFC captive insurer) or QFC bank must establish and maintain an internal audit function. Note QFC insurer and QFC bank are defined in the glossary. (2) An authorised firm that is not required by subrule (1) to have an internal audit function must establish and maintain such a function if appropriate because of the nature, scale and complexity of its business. (3) The Regulatory Authority may direct an authorised firm to establish and maintain an internal audit function. (4) An authorised firm’s internal audit function must be appropriate to: (a) the nature, scale and complexity of the firm’s business; and (b) its risk profile and legal status. Note As a general rule, QFC banks and QFC insurers (other than QFC captive insurers) are not required to have individuals approved to exercise the internal audit function until 1 January 2014—see r 3.2.5. 4.1.8 What makes up an authorised firm’s internal audit function? (1) An authorised firm’s internal audit function is made up of: (a) firm’s internal auditor (if any); and (b) any other employees allocated to the function; and
entity means any kind of entity, and includes, for example, any person. executive governance function means the function described in rule 3.1.3. exercise a function includes perform the function. finance function means the function described in rule 3.1.5. firm (or authorised firm) means a person that has been granted an authorisation in accordance with FSR, part 5. FSR means the Financial Services Regulations. function includes power. GENE means the General Rules 2005. governing body of an authorised firm has the meaning given by rule 2.2.1. insurer (or QFC insurer) means an authorised firm that has an authorisation to conduct insurance business. internal auditor means: (a) in the case of an authorised firm that has an individual approved to exercise the internal audit function—that individual; and (b) in the case of an insurer that does not have such an individual—the firm of auditors appointed under a material outsourcing arrangement to which chapter 5 applies. Note For the approval or appointment of internal auditors, see r 3.2.5. internal audit function means the function described in rule 3.1.10. internal control function means each of the following controlled functions: (a) the compliance oversight function; (b) the risk management function; (c) the internal audit function;
(d) the actuarial function. material outsourcing, for an authorised firm, means the outsourcing of a function of such importance that weakness or failure in the exercise of the function would cast serious doubt on: (a) the firm’s ability to comply with: (i) any regulations, rules or principles; or (ii) any condition, restriction or requirement of its authorisation; or (b) its financial performance or position; or (c) its ability to continue in business. MLRO function means the function described in rule 3.1.7. non-executive director of a firm means a director who has no responsibility for implementing the decisions or the policies of the firm’s governing body. non-executive governance function means the function described in rule 3.1.2. non-local firm means an authorised firm that is neither: (a) a company incorporated under the Companies Regulations 2005; nor (b) a limited liability partnership incorporated under the Limited Liability Partnership Regulations 2005. outsourcing, for an authorised firm, means any arrangement that involves the firm relying on a separate service provider (including a member of the firm’s group) for the exercise of a function relating to a regulated activity of the firm that would otherwise be exercised by the firm, but does not include the following arrangements: (a) advisory services (such as the provision of legal advice), audit services, training of personnel, billing, and physical security;
(b) supply arrangements and functions (including, for example, the supply of electricity or water and the provision of catering and cleaning services); (c) the purchase of standardised services (such as, for example, market information services and the provision of prices); (d) the appointment of a group employee to a controlled function for the firm. person means: (a) an individual (including an individual occupying an office or position from time to time); or (b) a legal person—that is, an entity, other than an individual, on which the legal system of a jurisdiction confers rights and imposes duties (including, for example, any entity that can own, deal with or dispose of property). PINS means the Insurance Business Rules 2006. QFC means the Qatar Financial Centre. QFC bank means an authorised firm that is: (a) a deposit-taker, within the meaning of BANK; or (b) an Islamic bank or Islamic investment dealer, within the respective meanings of the Islamic Banking Business Prudential Rules 2015. QFC insurer (or insurer) means an authorised firm that has an authorisation to conduct insurance business. regulated activity means an activity that is a regulated activity under FSR. Regulatory Authority means the Qatar Financial Centre Regulatory Authority established under the QFC Law, article 9. risk management and internal controls framework has the meaning given by rule 4.1.1.