IPO regulatory requirements for the Compliance function

Preparing for an Initial Public Offering (IPO) marks a pivotal moment in an organization’s journey. Beyond the opportunity to access new capital and enhance market visibility, it brings an increased focus on governance, transparency, and regulatory compliance. Building a strong compliance framework is vital to not only meet these obligations but to instill trust among investors and stakeholders. It lays the foundation for sustainable growth and ensures long-term success in a competitive marketplace.

The process of going public introduces specific regulatory complexities that demand meticulous planning and execution. Organizations embarking on this path must ensure their compliance infrastructure is robust, adaptable, and capable of meeting stringent regulatory standards. By addressing these requirements early, they can reduce risks and avoid delays, paving the way for a seamless transition to the public market. A forward looking approach also strengthens organizational resilience and operational efficiency, equipping businesses to thrive in an evolving regulatory environment.

While regulatory frameworks provide guidance, many companies encounter challenges in implementing them effectively. Balancing compliance with business objectives while addressing unique market conditions requires a thoughtful and tailored strategy. Closing this gap not only facilitates IPO readiness but also helps organizations achieve sustained governance and operational excellence.

Compliance operating model

A comprehensive compliance operating model, aligned with the SCA Governance Guide, helps to facilitate robust regulatory oversight, risk mitigation, and governance excellence for IPO companies in the UAE. Article 69 of the SCA Governance Guide outlines the requirements for establishing and maintaining a Compliance function.

Establish a Compliance function with clear reporting lines to the board and senior management
Define the job description of the Head of Compliance, emphasizing their role in regulatory oversight, policy implementation, and risk mitigation

Compliance risk assessment: Maintain an obligation register to identify and document regulatory risks
Third party due-diligence protocols: Implement measures to evaluate and monitor third-party relationships
Training and awareness: Conduct regular training sessions to enhance employee understanding of compliance policies
Monitoring program: Establish a schedule for periodic audits and reviews to ensure adherence

The detection and investigation of non-compliance incidents
Guidelines for case resolution and corrective action

Ensure that the Compliance function subordinates directly to senior management in terms of administration, and the Audit committee in exercising their duties. The Compliance function should report to the board on significant matters and irregularities
Reports should include updates on compliance risks, investigations, and mitigation measures