The five layers of obligation
The five sources compliance obligations come from: statutory law, regulations, regulatory guidance, supervisory expectations and industry standards.
Overview
Obligations do not come from one rulebook. They arrive in layers. A statute sets the frame; regulations made under it fill in the detail; guidance explains how the regulator reads the rules; supervisory expectations, set out in exam manuals and reviews, decide what good looks like in practice; and industry standards, adopted by regulation, contract or audit, add their own controls.
Each layer has different authors, different degrees of bindingness and a different pace of change. Statutes change rarely; guidance and supervisory expectations can shift every quarter.
It connects most directly to Statutory law, Regulation, Regulatory guidance, Supervisory expectation and Industry standard.
Example
Bank capital: the statute requires adequate capital, the regulation sets ratios, guidance explains calculation, the exam manual sets what supervisors test, and Basel standards set the benchmark.
Check the official sources below for legal scope, applicable dates and exceptions. This entry is an explanatory reference, not legal advice.
Why it matters
Most compliance tools read one or two layers. Firms that miss the others pass the law and fail the exam.
Who it affects
Every regulated organisation.
Where it sits
Ten linked steps connect where you operate to the proof that you complied.
- 01Jurisdiction
- 02Industry
- 03Activity
- 04Authority
- 05Regulation
- 06Requirement
- 07Guidance
- 08Control
- 09Evidence
- 10Enforcement
Connections
The terms most closely tied to The five layers of obligation. Select one to open it.
What to do about it
- 1Tag every obligation with the layer it came from.
- 2Watch the faster-moving layers more closely.
- 3Trace each lower-layer obligation back to its source.
From requirement to evidence.
This is where the name Regulation Layer comes from. Every obligation in the platform is tagged with the layer it came from, and the dial can be viewed layer by layer.
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