Risk.net
Banks urged to take action as FRTB implementation nears
09 Jun 2021
While the Fundamental Review of the Trading Book (FRTB) has been a long time in the making, and implementation guidance remains sparse in some jurisdictions, banks cannot afford further delays in deciding their market risk model approach and putting the necessary infrastructure and data management measures in place
With implementation less than two years away, it is imperative jurisdictions finalise local interpretation of FRTB rules, and banks take action to address the many remaining challenges to ensure full compliance.
Europe is the most advanced region in its preparation for FRTB implementation, including interpretation of the rules and the provision of guidelines to banks. But, outside of Europe – especially in jurisdictions such as the US – there have been few official statements on rule interpretation.
The Financial Conduct Authority (FCA) has warned it will not hesitate to take further action against firms over trading influencers, after winning a summary judgment against 24HR.
Full Ownership structure chart;
Pre-Approval Controlled Functions for board members and senior
staff, including whether these individuals have previously been
approved by the CBI (Board and Senior Management);
Number of FTE employees, whether any are shared with other
group entities; and
Staff Organisational Chart with reporting lines.
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Regulatory capital, own Funds Requirements, and Operational
funding levels;
Turnover (total income/revenue generated) for first 3
years;
Profitability; and
Sources of Regulatory and Share Capital/Funding.
The KFD must clearly and precisely address each point. The CBI
will review the completed KFD and revert to the applicant firm in
writing with any comments. If the KFD does not contain, or is
As a result of Brexit, UK-regulated firms will already have grappled with loss of passporting and equivalence measures, and the need to navigate national regimes and relocate staff. As.