18 Risk management function

The risk management function (RMF) should cover the whole investment firm. The RMF should have sufficient authority, stature and resources, taking into account the proportionality criteria listed in Title I, to implement risk policies and the risk management framework as set out in Section 17.

The RMF should have, where necessary, direct access to the management body in its supervisory function and its committees, where established, including in particular the risk committee.

The RMF should have access to all business lines and other internal units that have the potential to generate risk, as well as to relevant subsidiaries and affiliates.

Staff within the RMF should possess sufficient knowledge, skills and experience in relation to risk management techniques and procedures, and markets and products, and should have access to regular training.

The RMF should be a central organisational feature of the investment firm, structured so that it can implement risk policies and control the risk management framework. The RMF should play a key role in ensuring that the investment firm has effective risk management processes in place. The RMF should be actively involved in all material risk management decisions.

In a group, the RMF in the Union parent undertaking should be able to deliver a group-wide holistic view on all risks and to ensure that the risk strategy is complied with.

The RMF should provide relevant independent information, analyses and expert judgement on risk exposures, and advice on proposals and risk decisions made by business lines or internal units, and should inform the management body as to whether such information and advice is consistent with the investment firm ’s risk strategy and risk appetite. The RMF may recommend improvements to the risk management framework and corrective measures to remedy breaches of risk policies, procedures and limits.