5.1 Setting up committees

In accordance with Article 28 of the IFD and unless otherwise specified by national law,¹⁸ investment firms where the value of their on and off ‐ balance sheet assets is on average more than EUR 100 million over the four ‐ year period immediately preceding the given financial year must establish risk and remuneration committees to advise the management body in its supervisory function and to prepare the decisions to be taken by this body.

¹⁸ Article 28 of Directive (EU) 2019/2034 requires investment firms that do not meet the criteria set out in point (a) of Article 32(4) to establish a risk committee composed of members of the management body who do not perform any executive function in the investment firm concerned.

Where no risk committee is established, the references in these guidelines to this committee should be construed as referring to the management body in its supervisory function.

Investment firms may, taking into account the criteria set out in Title I of these guidelines, establish other committees (e.g. anti-money laundering/counter terrorist financing (AML/CTF), ethics, conduct and compliance committees).

Investment firms should ensure a clear allocation and distribution of duties and tasks between specialised committees of the management body. Each committee should have a documented mandate, including the scope of its responsibilities, by the management body in its supervisory function and establish appropriate working procedures.

Committees should support the supervisory function in specific areas and facilitate the development and implementation of a sound internal governance framework. Delegating to committees should not in any way release the management body in its supervisory function from collectively fulfilling its duties and responsibilities.