MIFIDPRU 8.2 Risk management objectives and policies
1A firm must disclose its risk management objectives and policies for the categories of risk addressed by:
- (1)
MIFIDPRU 4 (Own funds requirements);
- (2)
MIFIDPRU 5 (Concentration risk); and
- (3)
MIFIDPRU 6 (Liquidity).
1The risk management objectives and policies for each of the items listed in MIFIDPRU 8.2.1R must include:
- (1)
a concise statement approved by the firm’s governing body describing the potential for harm associated with the business strategy; and
- (2)
a summary of the strategies and processes used to manage each of the categories of risk listed in MIFIDPRU 8.2.1R and how this helps to reduce the potential for harm.
1In complying with MIFIDPRU 8.2.2R, a firm may consider that information drawn from the ICARA process is a relevant and useful way of disclosing:
- (1)
the firm’s approach to risk management by reference to its risk management policies;
- (2)
details of the firm’s risk management structure and operations, for example, the senior management responsible for each area of risk (where applicable), and any relevant committees and their responsibilities;
- (3)
how the firm sets its risk appetite; and
- (4)
a summary of how the firm assesses the effectiveness of its risk management processes.