The Hong Kong Monetary Authority has issued a 'comply or explain' reputational risk guidance moduleHONG KONG - In response to the market turmoil, the Hong Kong Monetary Authority (HKMA) has issued guidance for effective reputational risk management. A new module in its Supervisory Policy Manual, entitled 'RR-1: Reputation risk management', sets out to clarify the HKMA's approach to reputational risk and offer more comprehensive industry guidance.
The regulator states firms should incorporate reputational risk management into their wider risk management programme, but it will also adopt a 'comply or explain' strategy, which will allow firms to diverge from the guidelines provided the HKMA is satisfied with the reasoning behind it.
The HKMA, which developed the guidance after consultation with industry bodies, expects firms to use the module to develop reputational risk management frameworks that are proportional with the size and complexity of their business.
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