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Application provision

1.1 Unless otherwise stated, this Part applies to a CRR firm

  1. (1) with respect to the carrying on of the following from an establishment in the UK:
    1. (a) regulated activities;
    2. (b)  activities that constitute dealing in investments as principal, disregarding the exclusion in article 15 of Regulated Activities Order;
    3. (c) ancillary activities;
    4. (d)  in relation to MiFID business, ancillary services; and
    5. (e)  unregulated activities in a prudential context;
  2. (2) with respect to the carrying on of passported activities by it from a branch in another EEA state;
  3. (3in a prudential context with respect to activities wherever they are carried on; and
  4. (4taking into account any activity of other members of a group of which the firm is a member.

2.1A

03/01/2018

A firm’s risk management procedures must include effective procedures for risk assessment.

Additional Notes


[Art. 16(5) second paragraph of MiFID II]

2.2A

03/01/2018

A MiFID investment firm must extend the arrangements required by the Article 23 Risk Control Requirements so they apply with respect to other matters on the following basis:

  1. (1) references to “relevant persons” are references to relevant persons;
  2. (2) references to “investment services and activities” are references to regulated activities;
  3. (3) references to policies and procedures includes the policies and procedures set out in this Part; and
  4. (4) references to provision of reports and advice to senior management includes the provision of report and advice to senior personnel in accordance with General Organisational Requirements 4.1A.

2.2B

03/01/2018

A firm that is not a MiFID investment firm must comply with the Article 23 Risk Control Requirements on the basis set out in 2.2A and as if references to “investment firm” refer to a firm.

2.3

03/01/2018

firm must ensure that the management body approves and periodically reviews the strategies and policies for taking up, managing, monitoring and mitigating the risks the firm is or might be exposed to, including those posed by the macroeconomic environment in which it operates in relation to the status of the business cycle.

Additional Notes


[Note: Art. 76(1) of the CRD]

2.7

03/01/2018

  1. (1) A firm must ensure the following:
    1. (a) the management body has overall responsibility for risk management and devotes sufficient time to the consideration of risk issues; and
    2. (b) the management body is actively involved in and ensures that adequate resources are allocated to the management of all material risks addressed in the rules implementing the CRD and in the CRR as well as in the valuation of assets, the use of external ratings and internal models related to those risks.
  2. (2) A firm must establish reporting lines to the management body that cover all material risks and risk management policies and changes thereof.

Additional Notes


[Note: Art. 76(2) of the CRD]