Risk management

(1) A securities institution must establish appropriate strategies, principles, procedures and systems for risk management. These must ensure the identification, assessment, management, monitoring and reporting of the material risks and associated risk concentrations, and their causes and effects on the securities institution's own funds. This concerns 1. risks to customers; 2. risks to the market; 3. risks to the securities institution; 4. liquidity risks; and 5. concentration risk arising from exposures to central counterparties.
(2) In assessing risks to customers under subsection (1), third sentence, no. 1, the securities institution must take into account the effects of a segregated safekeeping of customer funds under section 84(2) of the Securities Trading Act. The securities institution must examine whether the risks to customers can be reduced by taking out professional indemnity insurance.
(3) In assessing the risks under subsection (1), third sentence, no. 3, the securities institution must take into account: 1. material changes in the book value of assets; 2. claims of customers against tied agents of the securities institution; 3. the default of customers or counterparties; 4. positions in financial instruments, currencies and commodities; and 5. its own obligations towards defined-benefit pension schemes. In assessing concentration risk under subsection (1), third sentence, no. 5, the securities institution must develop concrete plans and quantifiable targets, in line with the requirements laid down in Article 7a of Regulation (EU) No 648/2012, to monitor the concentration risk arising from exposures to central counterparties.
(4) In the event of a wind-down or discontinuation of their activities, securities institutions must, having regard to the viability and sustainability of their business models and strategies, give due consideration to the requirements and funding needs to be expected, with regard to the timing and the preservation of own funds and liquid assets, throughout the market-exit process.