6.1 Organisational framework

The management body of an investment firm should ensure a suitable and transparent organisational and operational structure for that investment firm and should have a written description of it. The structure should promote and demonstrate the effective and prudent management of an investment firm at the individual and consolidated levels.

The management body should ensure that the internal control functions have the appropriate financial and human resources as well as powers to effectively perform their role. As a minimum, the compliance function should operate independently, including that there is an appropriate segregation of duties. The reporting lines and the allocation of responsibilities, in particular among key function holders, within an investment firm should be clear, well-defined, coherent, enforceable and duly documented. The documentation should be updated as appropriate.

The structure of the investment firm should not impede the ability of the management body to oversee and manage effectively the risks the investment firm or the group faces or the ability of the competent authority to effectively supervise the investment firm.

The management body should assess whether and how material changes to the group ’ s structure (e.g. setting up of new subsidiaries, mergers and acquisitions, selling or winding-up parts of the group, or external developments) impact on the soundness of the investment firm ’s organisational framework. Where weaknesses are identified, the management body should make any necessary adjustments swiftly.