Related provisions for CREDS 2.2.55
1 - 20 of 43 items.
(1) The 5credit union'sgoverning body5has responsibility for ensuring that the credit union complies with the requirements of SYSC 4.1.1 R (see CREDS 2.2.1 G and CREDS 2.2.2 G). So, the governing body5 has overall responsibility for:(a) establishing objectives and formulating a business plan;(b) monitoring the financial position of the credit union;(c) determining and documenting policies and procedures;(d) directing and coordinating the work of all employees and volunteers, and
(1) Long-term incentive plans should be treated as pools of variable remuneration. Many common measures of performance for long-term incentive plans, such as earnings per share (EPS), are not adjusted for longer-term risk factors. Total shareholder return (TSR) includes dividend distributions in its measurement, which can also be based on unadjusted earnings data. If incentive plans mature within a two- to four-year period and are based on EPS or TSR, strategies can be devised
(1) Performance measures based primarily on revenues or turnover are unlikely to pay sufficient regard to the quality of business undertaken or services provided. Profits are a better measure provided they are adjusted for risk, including future risks not adequately captured by accounting profits.(2) Management accounts should provide profit data at such levels within the firm's structure as to enable a firm to see as accurate a picture of contributions of relevant staff to a
A firm must ensure that: (1) its pension policy is in line with its business strategy, objectives, values and long-term interests;(2) when an employee leaves the firm before retirement, any discretionary pension benefits are held by the firm for a period of five years in the form of instruments referred to in SYSC 19C.3.47R (1); and(3) when employees reach retirement, discretionary pension benefits are paid to the employee in the form of instruments in SYSC 19C.3.47R (1) and subject
At least two independent minds should be applied to the formulation and implementation of the policies of a common platform firm, a management company3, a full-scope UK AIFM5 and the UK branch of a non-EEA bank1. Where a firm1 nominates just two individuals to direct its business, the appropriate regulator will not regard them as both effectively directing the business where one of them makes some, albeit significant, decisions relating to only a few aspects of the business.
Where there are more than two individuals directing the business of a common platform firm, a management company3, a full-scope UK AIFM5 or the UK branch of a non-EEA bank,1 the appropriate regulator does not regard it as necessary for all of these individuals to be involved in all decisions relating to the determination of strategy and general direction. However, at least two individuals should be involved in all such decisions. Both individuals' judgement should be engaged
A firm may use external documentation (including contracts, transaction statements or advertising brochures) to define or clarify terms and conditions for its products or activities, its business strategy (for example, including through press statements), or its brand. Inappropriate or inaccurate information in external documents can lead to significant operational exposure.
A firm should establish and maintain appropriate systems and controls for the management of its IT system risks, having regard to:(1) its organisation and reporting structure for technology operations (including the adequacy of senior management oversight);(2) the extent to which technology requirements are addressed in its business strategy;(3) the appropriateness of its systems acquisition, development and maintenance activities (including the allocation of responsibilities
(1) This Remuneration Principle stresses the importance of risk adjustment in measuring performance, and the importance within that process of applying judgment and common sense. A firm should ask the risk management function to validate and assess risk-adjustment techniques, and to attend a meeting of the governing body or remuneration committee for this purpose.(2) A number of risk-adjustment techniques and measures are available, and a firm should choose those most appropriate
A firm must ensure that:(1) its pension policy is in line with its business strategy, objectives, values and long-term interests;(2) when an employee leaves the firm before retirement, any discretionary pension benefits are held by the firm for a period of five years in the form of instruments referred to in SYSC 19A.3.47 R (1); and(3) 3when an employee reaches retirement, discretionary pension benefits are paid to the employee in the form of instruments referred to in SYSC 19A.3.47
(1) The FCA expects that a firm appointing someone to have local responsibility for a function under SYSC 4.8.10R(2) (responsibility for a branch’s activities, business areas and management functions not under the management of a branch’sgoverning body) will appoint the most senior employee or officer of the firm with responsibility for that activity, business area or management function.(2) However, as explained in SYSC 4.8.27G (Setting overall strategy for a branch), the firm
(1) Generally, where a firm allocates responsibility under SYSC 4.8.10R to one of the firm’sSMF managers who is not based in the branch the FCA would expect:(a) that the responsibility would not be allocated to a manager whose responsibilities for the branch are limited to setting overall strategy for the branch; and(b) that, instead, the firm would allocate it to a manager who is the most senior person responsible for implementing the strategy for the branch.(2) See SUP 10C.1.5AG
A management company must ensure that its remuneration policy: (1) is in line with the business strategy, objectives, values and interests of: (a) the management company; (b) the UCITS it manages; and(c) the investors in such UCITS; and(2) includes measures to avoid conflicts of interest.[Note: article 14b(1)(b) of the UCITS Directive]
A management company must ensure that: (1) its pension policy is in line with the business strategy, objectives, values and long-term interests of: (a) the management company; and(b) the UCITS it manages; (2) when an employee leaves the management company before retirement, any discretionary pension benefits are held by the management company for a period of five years in the form of the instruments referred to in SYSC 19E.2.18R(1); and (3) for an employee reaching retirement,
An AIFM must ensure that:(1) its pension policy is in line with its business strategy, objectives, values and long-term interests of the AIFs it manages;(2) when an employee leaves the firm before retirement, any discretionary pension benefits are held by the firm for a period of five years in the form of instruments in SYSC 19B.1.17R (1); and(3) in the case of an employee reaching retirement, discretionary pension benefits are paid to the employee in the form of instruments referred
4The financial risk assessment should be based on a methodology which provides a reasonable estimate of the potential business losses which a UK RIE might incur in stressed but plausible market conditions. The FCA5 would expect a UK RIE to carry out a financial risk assessment at least once in every twelve-month period, or more frequently if there are material changes in the nature, scale or complexity of the UK RIE's operations or its business plans that suggest such financial
4The FCA5 would expect to consider the financial risk assessment, any proposal with respect to an operational risk buffer and, if applicable, the consolidated balance sheet, in formulating its guidance on the amount of eligible financial resources it considers to be sufficient for the UK RIE to hold in order to meet the recognition requirements. In formulating its guidance, the FCA5 would, where relevant, consider whether or not the financial risk assessment makes adequate provision
A firm that wishes to make a significant change to its business, or is unsure whether the changes it is proposing would be considered to be significant, should contact the relevant regulator. The relevant regulator27 will discuss with the firm whether it will be required to submit parts of the application pack and whether any reports from third parties may be required.127
If the variation ofPart 4A permission is given, the relevant regulator27 will expect a firm to commence a new regulated activity in accordance with its business plan (revised as necessary to take account of changes during the application process) or scheme of operations for an insurer. Firms should take this into consideration when determining when to make an application to the relevant regulator.272727
A firm must ensure that:(1) its pension policy is in line with its business strategy, objectives, values and long-term interests;(2) when an employee leaves the firm before retirement, any discretionary pension benefits are held by the firm for a period of five years in the form of instruments referred to in SYSC 19D.3.56R(1); and(3) when an employee reaches retirement, discretionary pension benefits are paid to the employee in the form of instruments referred to in SYSC 19D.3.56R(1)
The FCA will
adopt a pre-emptive approach which will be based on making forward-looking
judgments about firms' business
models, product strategy and how they run their businesses, to enable the FCA to identify and intervene earlier to
prevent problems crystallising. The FCA's approach
to supervising firms will contribute
to its delivery against its objective to protect and enhance the integrity
of the UK financial system (as
set out in the Act). Where the FCA has responsibilities
A firm must disclose its risk management objectives and policies for each separate category of risk, including the risks referred to under BIPRU 11.5.1 R to BIPRU 11.5.17 R. These disclosures must include:(1) the strategies and processes to manage those risks;(2) the structure and organisation of the relevant risk management function or other appropriate arrangements;(3) the scope and nature of risk reporting and measurement systems; and(4) the policies for hedging and mitigating
(1) The specific remuneration requirements in this chapter may apply only in relation to certain categories of employee. But the appropriate regulator would expect firms, in complying with the Remuneration Code general requirement, to apply certain principles on a firm-wide basis.(2) In particular, the appropriate regulator considers that firms should apply the principle relating to guaranteed variable remuneration on a firm-wide basis (Remuneration Principle 12(c); SYSC 19A.3.40
(1) An overseas firm, which is not an incoming firm, must notify the FCA4 within 30 business days of any person taking up or ceasing to hold the following positions:88(a) the firm's worldwide chief executive (that is, the person who, alone or jointly with one or more others, is responsible under the immediate authority of the directors for the whole of its business) if the person is based outside the United Kingdom;(b) the person within the overseas firm with a purely strategic
(1) A Chief Risk Officer should:(a) be accountable to the firm'sgoverning body for oversight of firm-wide risk management;(b) be fully independent of a firm's individual business units;(c) have sufficient authority, stature and resources for the effective execution of his responsibilities; (d) have unfettered access to any parts of the firm's business capable of having an impact on the firm's risk profile; (e) ensure that the data used by the firm to assess its risks are fit for
As part of its business planning and risk management obligations under SYSC, a firm must reverse stress test its business plan; that is, it must carry out stress tests and scenario analyses that test its business plan to failure. To that end, the firm must:(1) identify a range of adverse circumstances which would cause its business plan to become unviable and assess the likelihood that such events could crystallise; and(2) where those tests reveal a risk of business failure that
1In deciding how they will satisfy and continue to satisfy the threshold conditions set out in paragraphs 2F and 3E of Schedule 6 to the Act, firms should consider matters including (but not limited to) the following:(1) the assumptions underlying the firm's business model and justification for it;(2) the rationale for the business the firm proposes to do or continues to do, its competitive advantage, viability and the longer-term profitability of the business;(3) the needs of