Vērtējums Uzraudzības viedoklis Apsvērumi

To address specific deficiencies identified in the assessment of SREP elements, competent authorities may consider applying measures that are not directly linked to quantitative capital or liquidity requirements. This section provides a non-exhaustive list of possible supervisory measures that can be applied based on Articles 39 Directive (EU) 2019/2034. Competent authorities may apply other supervisory measures as set out in that Article if these are more appropriate to address the identified deficiencies as described in this section. The choice of measures should take into account the results of assessment performed in accordance with Titles 4, 5, 6 and 8 of these guidelines.

Business model analysis

Supervisory measures to address deficiencies identified in the BMA are likely to involve requiring the investment firm to adjust governance and control arrangements to help with the implementation of the business model and strategy or limiting certain business activities.

In accordance with Article 39(2), point (b) of Directive (EU) 2019/2034, competent authorities may require the investment firm to make adjustments to risk management and control arrangements, or to governance arrangements, to match the desired business model or strategy, by means including:

• a. adjusting the financial plan assumed in the strategy, if it is not supported by internal capital planning or credible assumptions;
• b. requiring changes to organisational structures, reinforcement of risk management and control functions and arrangements to support the implementation of the business model or strategy; and/or
• c. requiring changes to and reinforcement of IT systems to support the implementation of the business model or strategy.

In accordance with Article 39(2), point (e) of Directive (EU) 2019/2034, competent authorities may require the investment firm to make changes to the business model or strategy where:

• a. they are not supported by appropriate organisational, governance or risk control and management arrangements;
• b. they are not supported by capital and operational plans, including allocation of appropriate financial, human and technological (IT) resources; and/or
• c. there are significant concerns about the sustainability of the business model.

In accordance with Article 39(2), point (f) of Directive (EU) 2019/2034, competent authorities may:

• a. require investment firms to reduce the risk inherent in the products they originate/distribute, by means including:

• b. require the investment firm to reduce the risk inherent in its systems, by means including:

• c. require investment firms to reduce the risk inherent in their activities, including outsourced activities, by means including:

Internal governance and investment firm-wide controls

Supervisory measures to address deficiencies identified in the assessment of internal governance and investment firm-wide controls may focus on requiring the investment firm to strengthen governance and control arrangements, or reducing the risk inherent in its products, systems and operations. When applying supervisory measures to address deficiencies identified in the assessment of the internal governance, competent authorities should engage with competent authorities for the purpose of Directive 2014/65/EU so that the underlying deficiencies/vulnerabilities are addressed in a consistent manner.

In accordance with Article 39(2), point (b) of Directive (EU) 2019/2034, competent authorities may:

• a. require the investment firm to make changes to its overall governance arrangements and organisation, by means including requiring:

• b. require the investment firm to make changes to the organisation, composition or working arrangements of the management body;
• c. require the investment firm to strengthen its overall risk management arrangements, by means including requiring:

• d. require the investment firm to strengthen internal control arrangements and functions, by means including requiring:

• e. require the investment firm to enhance information systems or business continuity arrangements, for example by requiring:

In accordance with Article 39(2), point (g) of Directive (EU) 2019/2034, competent authorities may require the investment firm to:

• a. make changes to remuneration polices; and/or
• b. limit variable remuneration as a percentage of net revenues.

Based on the outcomes of the qualitative review of stress testing programmes and if deficiencies are identified, competent authorities may require the investment firm:

• a. to develop a plan of remedial action aimed at improving stress testing programmes and practices;
• b. to make changes to the investment firm’s capital plan;
• c. where appropriate, to run specific prescribed scenarios (or elements of those) or using specific assumptions.

Risk-to-client

Supervisory measures to address deficiencies identified in the assessment of the risk-to-client and the associated management and control arrangements are likely to focus on requiring the investment firm to reduce the level of inherent risk or strengthening management and control arrangements.

In accordance with Article 39(2), point (b) of Directive (EU) 2019/2034, competent authorities may require the investment firm to:

• a. involve the management body or its committees more actively in risk-to-client management;
• b. improve the organisational framework to ensure effective providing of services to clients with sufficient (both qualitative and quantitative) human and technical resources (including front and back offices, information systems);
• c. improve the control framework (effectiveness and independence of control functions) to mitigate its risks to clients;
• d. enhance the quality and frequency of reporting on risk-to-client to the management body and senior management.

In accordance with Article 39(2), point (d) of Directive (EU) 2019/2034, competent authorities may require the investment firm to:

• a. apply a specific provisioning policy;
• b. adjust the internal estimates of the K-factor amount for risk-to-client and calculate additional own funds requirement.

In accordance with Article 39(2), points (e) and (f) of Directive (EU) 2019/2034, competent authorities may require the investment firm to:

• a. restrict or limit the business, operations or network;
• b. request the divestment of activities that pose excessive risk to the financial soundness of the investment firm;
• c. reduce the risk inherent in the activities, products (including exposure to complex products and transactions, level of concentration risk) and systems including outsourced activities.

Risk-to-market

Supervisory measures to address deficiencies identified in the assessment of risk-to-market and the associated management and control arrangements are likely to focus on requiring the investment firm to reduce the level of inherent risk or to strengthen management and control arrangements.

In accordance with Article 39(2), point (b) of Directive (EU) 2019/2034, competent authorities may require the investment firm to address deficiencies identified with regard to the investment firm’s ability to identify, measure, monitor and control risk-to-market, by means including:

• a. ensuring that investment firm’s market risk properly reflects the investment firm’s appetite for market risk and is consistent with the overall risk appetite;
• b. requiring appropriate organisational framework with sufficient (both qualitative and quantitative) human and technical resources;
• c. enhancing the performance of the investment firm’s internal approaches, or of its back testing or stress-testing capacity;
• d. enhancing the quality and frequency of the reporting to the investment firm’s management body and senior management; and/or
• e. requiring more frequent and in-depth internal audits with reference to the risk-to-market and calculate additional own funds requirement.

In accordance with Article 39(2), point (e) of Directive (EU) 2019/2034, competent authorities may:

• a. restrict investment in certain products when the investment firm’s policies and procedures do not ensure that the risk from those products will be adequately covered and controlled;
• b. require the investment firm to present a plan to reduce its exposures to distressed assets and/or illiquid positions gradually; and/or
• c. require the divestment of financial products, including where the valuation processes of the investment firm do not produce conservative valuations.

In accordance with Article 39(2), point (f) of Directive (EU) 2019/2034, competent authorities may:

• a. require the investment firm to reduce the level of inherent market risk (through hedging or sale of assets); and/or
• b. require the investment firm to increase the amount of derivatives settled through central counterparties (CCPs).

Risk-to-firm

Supervisory measures to address deficiencies identified in the assessment of risk-to-firm and the associated management and control arrangements are likely to focus on requiring the investment firm to reduce the level of inherent risk or strengthening management and control arrangements.

In accordance with Article 39(2), point (b) of Directive (EU) 2019/2034, competent authorities may:

• a. ensure that investment firm’s risk strategy properly reflects the investment firm’s appetite for risk-to-firm including daily trading flow, concentration and counterparty default) and is consistent with the overall risk appetite;
• b. require appropriate organisational framework with sufficient (both qualitative and quantitative) human and technical resources;
• c. require the investment firm to involve the management body or its committees more actively in the risk-to-firm management;
• d. require the investment firm to consider inherent risk-to-firm when approving new products and systems;
• e. require the investment firm to improve operational risk identification (relating to daily trading flow) and measurement systems; and/or
• f. adjust the internal estimates of the k factor amount for risk-to-firm and calculate additional own funds requirement.

In accordance with Article 39(2), points (e) and (f) of Directive (EU) 2019/2034, competent authorities may:

• a. require the investment firm to restrict or limit the business, operations or network of investments firms (reducing the degree of concentration risk or the exposure to trading counterparty default risk);
• b. require the divestment of activities that pose excessive risks to the soundness of the investment firm;
• c. require the investment firm to reduce the scope and/or extent of outsourcing activities including restructuring or exiting from outsourcing arrangements and switching to another service provider;
• d. require the investment firm to mitigate risk-to-firm exposures;
• e. restrict or limit the business, operations or network of investment firms or to request the divestment of activities that pose excessive risks to the soundness of an investment firm;
• f. require the reduction of the risk inherent in the activities, products and systems of investment firms, including the ML/TF risks with prudential implications.

Other risks to capital

Irrespective of the requirement to hold additional own funds pursuant to Article 39(1), point (a) of Directive (EU) 2019/2034, competent authorities should consider the application of supervisory measures where the outcomes of SREP or other supervisory activities reveal deficiencies in the investment firm’s measurement, management, monitoring and control of operational risk, including in particular ICT risk, interest rate risk arising from non-trading book activities, or any other risk relevant for the investment firm.

Liquidity risk

authorities may:

• a. require diversification of the liquidity buffer and currency consistency between liquid assets and net outflows;
• b. impose requirements on the concentration of the liquid assets held, including:

• c. impose restrictions on short-term contractual or behavioural maturity mismatches:

In accordance with Article 39(2), point (b) of Directive (EU) 2019/2034, competent authorities may require action to be taken to address deficiencies identified with regard to the investment firm’s ability to identify, measure, monitor and control liquidity risk, by means including:

• a. enhancing its stress-testing capacity to improve its ability to identify and quantify material sources of liquidity risk to the investment firm;
• b. enhancing its ability to monetise its liquid assets;
• c. enhancing its liquidity contingency plan and liquidity early warning indicators framework; and/or
• d. enhancing reporting of liquidity management information to the investment firm’s management body and senior management.

In accordance with Article 39(2), point (k) of Directive (EU) 2019/2034 competent authorities may require action to be taken to amend the investment firm’s funding profile, including:

• a. reducing its dependency on certain (potentially volatile) funding markets, such as wholesale funding;
• b. reducing the concentration of its funding profile with respect to counterparties, peaks in the long-term maturity profile, (mismatches in) currencies; and/or
• c. reducing the amount of its encumbered assets, potentially differentiating between total encumbrance and overcollateralization.