1.Affiliate: an entity owned by another entity by more than 25% and less than 50% of its capital.
2. Bank: A financial entity, which is authorized by the Central Bank to accept deposits as a bank.
3. Board: The Bank’s board of directors.
4. Central Bank: The Central Bank of the United Arab Emirates.
5. Central Bank Law: Union Law No (10) of 1980 concerning the Central Bank, the Monetary System and Organization of Banking as amended or replaced from time to time.
6. Conflict of interest: A situation of actual or perceived conflict between the duty and private or other interests of a person, which could improperly influence the performance of his or her duties and responsibilities.
7. Control Functions: Those functions that have a responsibility independent from management to provide objective assessment, reporting and/or assurance; this includes the risk management function, the compliance function and the internal audit function.
8. Controlling Shareholder: A shareholder who has the ability to directly or indirectly influence or control the appointment of the majority of the board of directors, or the decisions made by the board or by the general assembly of the entity, through the ownership of a percentage of the shares or stocks or under an agreement or other arrangement providing for such influence.
9. Compliance function: An independent function that identifies, assesses, advises on, monitors and reports on the Bank’s compliance risk.
10.Compliance risk: The risk of legal or regulatory sanctions, material financial loss, or loss to reputation a Bank may suffer as a result of its failure to comply with laws, regulations, rules, related self-regulatory organization standards, and codes of conduct applicable to its banking activities.
11.Group: A group of entities which includes an entity (the ‘first entity’) and:
a.any Controlling Shareholder of the first entity;
b.any Subsidiary of the first entity or of any Controlling Shareholder of the first entity; and
c.any Affiliate.
12.Internal Audit function: An independent function that provides independent assurance to the Board of directors and Senior Management on the quality and effectiveness of a Bank’s internal control, risk management and governance systems and processes, thereby helping the Board and Senior Management protect their organization and its reputation.
13.Internal Control: Consists of five interrelated elements, whose effective functioning is essential to achieving a Bank’s performance, information, and compliance objectives:
a.management oversight and the control culture;
b.risk recognition and assessment;
c.control activities and segregation of duties;
d.information and communication; and
e.monitoring activities and correcting deficiencies.
14.Islamic Financial Services: Shari’a compliant financial services offered by Islamic Banks and Conventional Banks offering Islamic banking products (Islamic Windows).
15.Risk Management function: Collectively, the systems, structures, policies, procedures and people that measure, monitor and report risk on a Bank-wide, or if applicable, Group-wide basis.
16.Senior Management: The executive management of the Bank responsible and accountable to the Board for the sound and prudent day-to-day management of the Bank, generally including, but not limited to, the chief executive officer, chief financial officer, chief risk officer, and heads of the compliance and internal audit functions.
17.Subsidiary: An entity, owned by another entity by more than 50% of its capital, or is under full control of that entity regarding the appointment of the board of directors.