BANK 10.1.3 Requirements — group risk

(1) A banking business firm must effectively manage risks arising from its membership in a corporate group.
(2) A banking business firm that is a member of a corporate group must establish and maintain systems and controls to monitor:
(a) the effect on the firm of its membership in the group;
(b) the effect on the firm of the activities of other members of the group;
(c) compliance with group supervision and reporting requirements; and
(d) funding within the group.

A banking business firm may take into account its position within its corporate group. It would be reasonable for a small firm within a larger group to place some reliance on its parent to ensure that there are appropriate systems and controls to manage group risk.
(3) The firm must also have systems to enable it to calculate its financial group capital requirement and resources. The systems must include a means of analysing realistic scenarios and the effects on the financial group's capital requirement and resources if those scenarios occurred.
Derived from QFCRA RM/2014-2 (as from 1st January 2015).