11.3.1The Manager in Charge and the Board of Directors (or the Owner/Partners where there is no Board of Directors) of the Licensed Person have the overall responsibility to create a culture of zero tolerance to fraud and to oversee the implementation of the Anti-Fraud Framework;
11.3.2The Licensed Person must appoint or designate a Fraud Prevention Officer who must be responsible to design, implement and manage an appropriate Anti-Fraud Framework;
11.3.3Depending on the nature, size and complexity of the business, the Licensed Person may appoint a dedicated Fraud Prevention Officer or combine this role with another suitable function subject to the conditions under Paragraphs 7.2.4 (a) of Chapter 7, 16.4.7 (a) and 16.5.1 (g) of Chapter 16;
11.3.4The Licensed Person’s recruitment process must fulfil the requirements of Paragraph 8.2 of Chapter 8 at a minimum;
11.3.5Fraud investigations must be undertaken by a team that includes the Fraud Prevention Officer, Internal Auditor and the concerned functional head at a minimum. The Licensed Person must ensure that a person, who is suspected in relation to a fraud incident, is not involved in the investigation. The investigation report must be submitted to the Board of Directors (or to the Owner/Partners where there is no Board of Directors);
11.3.6The Licensed Person must consult the legal advisors (internal or external) before, during or after the investigation for guidance on civil and criminal proceedings and recovery of losses;
11.3.7The Human Resources Department of the Licensed Person must take disciplinary action against employees who are involved in perpetrating internal fraud;
11.3.8The Internal Auditor is responsible for:
a)conducting Fraud Risk Assessments jointly with the Fraud Prevention Officer on an annual basis and submit the report to the Board of Directors (or to the Owner/Partners where there is no Board of Directors);
b)reviewing the adequacy of related policies and procedures;
c)confirming the availability of insurance cover to protect the interest of the Licensed Person;
d)confirming the recruitment process is in line with Paragraph 8.2 of Chapter 8;
e)confirming that appropriate anti-fraud trainings are given to employees; and
f)confirming that fraud incidents are appropriately reported in accordance with Paragraph 11.4 of this Chapter.