What is Governance & Risk Management Audit for a SEMI?

It is an audit of your governance structures (board, oversight, policies) and risk management framework to ensure they meet regulatory requirements, internally sound, and effective in mitigating risks.

Why is governance structure important in SEMI operations?

Good governance ensures clear roles, accountability, oversight, effective decision-making and helps ensure that risk exposures are managed appropriately and transparently.

What does risk framework assessment involve?

It involves reviewing how risks are identified, assessed, prioritised, mitigated, monitored and reported, including the tools, metrics and processes used.

How are internal controls tested during the audit?

By reviewing documentation, transaction samples, observing practices, examining oversight or monitoring reports, and verifying whether the intended controls operate in practice.

What is gap analysis & remediation plan?

Gap analysis identifies where current practices fall short of regulatory or best practice expectations. Remediation plan lays out actions, timelines, and responsibilities to close those gaps.

Who should see the audit findings and how often should such audits be done?

Findings are typically shared with senior management, compliance/risk teams, and the board or oversight committees. Audits should be periodic — often annually or when there are major changes in regulation or operations.

Governance Risk Management Audit for SEMIs

Governance & Risk Management Audit

Strong governance and effective risk management are critical for SEMIs to maintain regulatory compliance, operational resilience, and stakeholder confidence. ABM provides a thorough, independent assessment of your governance structures and risk frameworks, ensuring alignment with FCA expectations and best practices.

Governance Structure Review

We conduct a detailed analysis of your board composition, senior management roles, and reporting lines. Our review examines whether responsibilities are clearly defined, decision-making processes are transparent, and accountability mechanisms are robust. This includes assessment of board committees, escalation protocols, and adherence to regulatory governance standards.

Policies and Procedures Assessment

ABM evaluates your internal policies and operational procedures to ensure they effectively manage financial, operational, and compliance risks. This includes reviewing internal control systems, approval workflows, and compliance monitoring mechanisms to identify gaps or inefficiencies.

Risk Management Framework

We assess how your SEMI identifies, evaluates, and mitigates risks across all operational areas, including financial crime, operational failures, fraud, liquidity, and technology risks. Our audit examines the risk register, risk appetite statements, and risk escalation processes to ensure they are comprehensive and actionable.

Board Oversight & Reporting

Our team reviews how senior management and the board oversee operational, financial, and compliance risks. We assess reporting structures, management information flows, and regulatory reporting processes to ensure decision-makers have accurate, timely, and actionable information.

Gap Analysis & Recommendations

ABM identifies deficiencies or weaknesses in governance and risk frameworks, providing prioritized recommendations to strengthen accountability, improve oversight, and enhance resilience. Recommendations may include updated policies, revised reporting lines, enhanced risk monitoring, or additional training for board and staff.

Regulatory Inspection Preparedness

We prepare your SEMI for FCA reviews or inspections by assessing governance documentation, risk management practices, and board oversight procedures. This ensures your institution can demonstrate strong governance, effective risk mitigation, and regulatory compliance during audits.

Continuous Improvement Support

Beyond the audit, ABM provides ongoing advisory support to maintain and improve governance and risk management processes. This includes periodic framework updates, board training, risk monitoring enhancements, and implementation support for continuous regulatory and operational improvement.