New compliance, audit rules for listed companies

CMA dictates establishing necessary departments

The newly formed Capital Markets Authority (CMA) said companies listed or to be listed on the Beirut Stock Exchange will be required to establish compliance and internal audit departments.

The decision applies to listed companies that have at least 20 shareholders and total revenues of $20 million. It does not concern banks, financial institutions, and brokerage firms, which already have their own requirements. Companies have one year to put these departments in place.

The compliance department will monitor abidance to laws, instructions, and regulations issued by the CMA, and follow up on amendments. It will also take appropriate measures to combat money laundering and terrorism funding.

The internal audit department should prepare an internal audit charter approved by a company’s board of directors, and guaranteeing its independence. It will implement an annual audit plan prepared after a comprehensive risk analysis. It will also evaluate the work of other departments to protect the rights of shareholders. All corporate operations and activities should be fully audited within a two-year audit cycle.

The two departments should file periodic reports to the company’s board of directors.