| Deficiencies in internal governance and investment firm-1 wide arrangements control | • • • • • | The investment firm has a robust and transparent organisational structure with clear responsibilities and separation of risk taking from risk management and control functions. There is a sound corporate culture, management of conflicts of interest and whistleblowing processes. The composition and functioning of the management body are appropriate. The remuneration policy is in line with the investment firm’s risk strategy and long-term interests. The risk management framework and risk management |
| pose a low level of risk to the viability of the investment firm. | • • • • • • | processes are appropriate. The internal control framework and internal controls are appropriate. The internal risk management, compliance and audit functions are independent and have sufficient resources and the internal audit function operates effectively in accordance with established international standards and requirements. Information and communication technologies are appropriate. The business continuity and contingency planning arrangements are appropriate. The investment firm has a largely robust and transparent organisational structure with clear responsibilities and separation of risk taking from risk management and control functions. There is a largely sound corporate culture, management of |
| Deficiencies in internal governance and investment firm-wide control arrangements 2 pose a medium- | • • • | conflicts of interest and whistleblowing processes. The composition and functioning of the management body are largely appropriate. The remuneration policy is largely in line with the investment firm’s risk strategy and long-term interests. The risk management framework and risk management |
| low level of risk to the viability of the investment firm. | • • • • • • | processes are largely appropriate. The internal control framework and internal controls are largely appropriate. The internal risk management, compliance and audit functions are independent and their operations are largely effective. Information and communication technologies are largely appropriate. The business continuity and contingency planning arrangements are largely appropriate. The investment firm’s organisational structure and responsibilities are not fully transparent and risk taking is not fully separated from risk management and control functions. There are doubts about the appropriateness of the corporate culture, management of conflicts of interest and/or whistleblowing processes. |
| Deficiencies in internal governance and investment firm-wide control 3 arrangements pose a medium- | • • • | There are doubts about the appropriateness of the composition and functioning of the management body. There are concerns that the remuneration policy may conflict with the investment firm’s risk strategy and long-term interests. There management are doubts framework about and the risk appropriateness management processes. of the risk |
| high level of risk to the viability of the investment firm. | • • • • • • | There are doubts about the appropriateness of the internal control framework and internal controls. There are doubts about the independence and effective operation of the internal risk management, compliance and audit functions. There are doubts about the appropriateness of information and communication technologies. There are doubts about the appropriateness of the arrangements for business continuity and contingency planning. The investment firm’s organisational structure and responsibilities are not transparent and risk-taking is not separated from risk management and control functions. The corporate culture, management of conflicts of interest and/ or whistleblowing processes are inappropriate. |
| Deficiencies in internal governance and investment firm-wide control 4 arrangements pose a high level of risk to the viability of the investment firm. | • • • • • • • | The composition and functioning of the management body are inappropriate. The remuneration policy conflicts with the investment firm’s risk strategy and long-term interests. The risk management framework and the risk management processes are inappropriate. The internal risk management, compliance and/or audit function is not independent and/or the internal audit functions are not operating in accordance with established international standards and requirements; operations are not effective. The internal control framework and internal controls are inappropriate. The information and communication technologies are inappropriate. The business continuity and contingency planning arrangements are inappropriate. |