| Risk Supervisory score view | • | Considerations | Considerations in relation in relation to inherent risk to adequate management and controls The nature of activities implies • There is consistency nonmaterial risk/very low investment between the risk. investment firm’s |
| There is a low risk of significant prudential impact on the 1 investment firm considering the level of inherent risk and the management and controls. | • | • • • • • | The nature and composition of risk management and exposure implies nonmaterial risk/very controls and its overall low risk. strategy and risk Exposure to counterparty default is not appetite. material/very low. • The organisational Exposure to risks related to employee framework is robust benefits and pension risk is not with clear material/very low. responsibilities and a The material/very level of low. concentration risk is not clear between management separation risk takers of tasks and and The level of operational risk related to control functions. processes and systems is not material/very low. The nature of activities implies low to • Measurement, |
| There is a medium-low risk of | | • | medium investment risk. monitoring and The nature and composition of risk reporting systems are exposure implies low to medium risk. appropriate. |
| significant prudential 2 impact on the investment firm considering the level of inherent risk and the management and controls. | | • • • • | Exposure to counterparty default is low to medium. Exposure to risks related to employee benefits and pension risk is medium to high. The level of concentration risk is low to medium. The level of operational risk related to processes and systems is low to medium. |
| There is a medium-high risk of significant prudential 3 impact on the investment firm considering the level of inherent risk and the management and controls. | • | • • • • | The nature of activities implies medium • There is a deficiency in to high investment risk. the investment firm’s The nature and composition of risk management and exposure implies medium to high risk. controls compared to Exposure to counterparty default is its overall strategy and medium to high. risk appetite. The level of concentration risk is medium • The organisational to high. framework lacks clear responsibilities and a The level of operational risk related to clear separation of tasks processes and systems is medium to between risk takers and high. management and control functions. |
| There risk of significant is a high | • | | The investment nature risk. of activities implies high • Measurement, monitoring and |
| prudential impact on the 4 investment firm considering the level of inherent risk and the management and controls. | | • • • • • | The nature and composition of risk reporting systems are exposure implies high risk. not sufficient or Exposure to counterparty default is high. consistent enough, Exposure to risks related to employee some risks are not benefits and pension risk is high. properly monitored or The level of concentration risk is high. reported. The level of operational risk related to processes and systems is high. |