Content Options:

Add to favourites

View Options:

More Resources:

External link Handbook Publications

You are viewing the version of the document as on 2021-12-31.

MIFIDPRU 7.2 Internal governance

MIFIDPRU 7.2.1R
  1. (1)

    1A MIFIDPRU investment firm must have robust governance arrangements, including:

    1. (a)

      a clear organisational structure with well defined, transparent and consistent lines of responsibility;

    2. (b)

      effective processes to identify, manage, monitor and report the risks the firm is or might be exposed to, or the firm poses or might pose to others; and

    3. (c)

      adequate internal control mechanisms, including sound administration and accounting procedures.

  2. (2)

    1The arrangements in (1) must:

    1. (a)

      be appropriate and proportionate to the nature, scale and complexity of the risks inherent in the business model and the activities of the firm; and

    2. (b)

      be compatible with the requirements in the FCA Handbook relating to risk management and internal governance, for example those in MIFIDPRU 7 and SYSC, that apply to the firm.

MIFIDPRU 7.2.2G

1When establishing and maintaining the arrangements in MIFIDPRU 7.2.1R(1), a firm should consider at least the following:

  1. (1)

    the requirements that apply to the firm under MIFIDPRU 7 and SYSC 19G (MIFIDPRU Remuneration Code);

  2. (2)

    the legal structure of the firm, including its ownership and funding structure;

  3. (3)

    whether the firm is part of a group;

  4. (4)

    the type of activities for which the firm is authorised, including the complexity and volume of those activities;

  5. (5)

    the business model and strategy of the firm, including its risk strategy, risk appetite and risk profile;

  6. (6)

    the types of client the firm has;

  7. (7)

    the outsourced functions and distribution channels of the firm; and

  8. (8)

    the firm’s existing IT systems, including continuity systems.