210. Where judgemental approaches are used, investment firms should ensure a sufficient level of …

Where judgemental approaches are used, investment firms should ensure a sufficient level of transparency and objectivity when judgements are made by:

a. setting a clear written policy outlining parameters and key considerations on which the judgement will be based;
b. providing clear and complete documentation of the final decision regarding the risk and performance measurement or applied risk adjustments;
c. involving relevant control functions;
d. considering the personal incentives of the staff making the judgement and any conflicts of interest;
e. implementing appropriate checks and balances, including, for example, making such adjustments within a panel involving staff from business units, corporate and control functions, etc.;
f. approving the assessment made by a control function or at an appropriate hierarchical level above the function making the assessment, e.g. at the management body in its management or supervisory function or at the remuneration committee.

1. Overview

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Standards
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