CTRL 7.1.6 Risk appetite statement
(1) An authorised firm must have a documented risk appetite statement. A risk appetite statement is a high-level qualitative statement that clearly captures the firm’s attitude to, and its level of acceptance of, different risks.
(2) The firm’s risk appetite is the aggregate level and types of risk that the firm is willing to assume to achieve its strategic objectives and business plan. In setting its risk appetite, the firm must not breach its obligations or constraints determined by regulatory capital requirements, or liquidity or other needs.
(3) If appropriate, the statement must specify quantitative measures.
(4) The firm’s governing body must review and approve the statement annually.
|Derived from QFCRA RM/2020-4 (as from 1st July 2021)|