20. The management body’s responsibilities should include at least setting, approving, and …

The management body’s responsibilities should include at least setting, approving, and overseeing the implementation of:

• a. the overall business strategy and the key policies of the issuer within the applicable legal and regulatory framework, taking into account the issuer ’s long -term financial interests and solvency and interest of the holders of ARTs.
• b. the policies required under Article 34(5) of Regulation (EU) 2023/1114; such policies should be consistent with the risk appetite and tolerance of the issuer and the characteristics, the needs of the clients of the issuer of ARTs to whom they will be offered and their prospective holders;
• c. the organisation of the issuer for the issuance of ARTs specifying the skills, knowledge and expertise required by staff and the necessary resources;
• d. the overall risk strategy, the issuer’s risk appetite and its risk management framework, including adequate policies and procedures, taking into account the macroeconomic environment and the business cycle, and specifying the involvement of the management body in risk management issues;
• e. an adequate and effective internal control framework including a risk management framework and well-functioning internal control mechanisms to ensure compliance with applicable regulatory requirements including with regard to the management of reserve of assets;
• f. a remuneration policy for issuers of significant ARTs that is in line with Article 45(1) of Regulation (EU) 2023/1114⁹ ;
• g. the policies and procedures to identify, prevent, manage and disclose conflicts of interest, in line with Article 32 of Regulation (EU) 2023/1114 10;
• h. arrangements that aim to ensure that the individual and collective suitability assessments of the management body are carried out effectively, that the composition of the management body is appropriate, and that the management body performs its functions effectively;
• i. a risk culture in line with Title IV Section 7 which addresses the issuer of ARTs ’ risk awareness and risk-taking behaviour;
• j. a corporate culture and values in line with Title IV Section 8 which foster responsible and ethical behaviour, including a code of conduct or similar instrument;
• k. arrangements that aim to ensure the integrity of the accounting and financial reporting systems, including financial and operational controls and compliance with the law and relevant standards.

⁹ See the RTS on the minimum content of the governance arrangements on the remuneration policy for issuers of significant ARTs in accordance with Article 45(7)(a) of Regulation (EU) 2023/1114.

1. Overview

1.1 References

• Article 34 5.
• Article 45 1.
• Article 32 Identification, prevention, management and disclosure of conflicts of interest

1.2 Identified Requirements

1.3 Related Standards

2. Identified Requirements

3. Related Standards

• EBA - Published by the European Banking Authority at https://www.eba.europa.eu/