59. Where established, the risk committee should at least: a. advise and support the management …

Where established, the risk committee should at least:

• a. advise and support the management body in its supervisory function with regard to the investment firm’s overall current and future risk strategy and risk appetite, and assist the management body in overseeing the implementation of that strategy, to ensure that they are in line with the business objectives, corporate culture and values of the investment firm;
• b. assist the management body in its supervisory function in overseeing the implementation of the investment firm ’ s risk strategy and setting the corresponding limits;
• c. oversee the implementation of the strategies for capital and liquidity management as well as for all other relevant risks of an investment firm, such as risks to clients, risks to the market, risks to firms, operational risk (including legal and IT risks) and reputational risk in order to assess their adequacy against the approved risk strategy and risk appetite;
• d. provide the management body in its supervisory function with recommendations for necessary adjustments to the risk strategy resulting from, inter alia, changes to the business model of the investment firm, market developments or recommendations made by the risk management function;
• e. provide advice on the appointment of external consultants that the supervisory function may decide to engage for advice or support;
• f. review a number of possible scenarios, including stressed scenarios, to assess how the investment firm ’s risk profile would react to external and internal events;
• g. oversee the alignment between all material financial instruments and services offered to clients and the business model and risk strategy of the investment firm. The risk committee, where established, should assess the risks associated with the financial instruments and services offered and take into account the alignment between the prices assigned to and the profits gained from those products and services; and
• h. assess the recommendations of internal or external auditors and follow up on the appropriate implementation of measures taken.

1. Overview

1.1 References

1.2 Identified Requirements

1.3 Related Standards

2. Identified Requirements

3. Related Standards

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