239. To achieve a comprehensive understanding of the investment firm’s Risk-to-Firm profile …

To achieve a comprehensive understanding of the investment firm’s Risk-to-Firm profile, competent authorities should review the governance and risk management framework that reduce the risk arising from the trading flow, concentration and counterparty default. To this end, competent authorities should assess the following elements while taking into account the volume, nature and complexity of the investment firm’s activities:

• a. the investment firm has a sound, clearly formulated and documented risk strategy regarding trading flow, concentration and counterparty default, approved by their management body;
• b. the investment firm’s risk strategy properly reflects the investment firm’s appetite for these risks and is consistent with the overall risk appetite;
• c. the investment firm has an appropriate organisational framework for the management, measurement, monitoring and control of concentration and counterparty default risks, with sufficient (both qualitative and quantitative) human and technical resources;
• d. the investment firm has clearly defined policies and procedures for the identification, management, measurement and control of Risks-to-Firm, including limits reflecting risk appetite set by the Board;
• e. the investment firm has an appropriate framework for identifying, understanding and measuring Risks-to-Firm, in line with the investment firm’s size and complexity, and that this framework is compliant with relevant minimum requirements in accordance with the relevant EU and national implementing legislation; and
• f. the investment firm has a strong and comprehensive control framework and sound safeguards to mitigate its Risks-to-Firm in line with its risk management strategy and risk appetite.

6.5.4 Summary of findings and scoring

1. Pārskats

1.1 Atsauces

1.2 Identificētās prasības

1.3 Saistītie standarti

2. Identificētās prasības

3. Saistītie standarti

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