Working Group # 7 – ReportGeneral Business and Operational Risks

Working Group # 7Principle # 15General Business Risk 1. What constitutes "compliance" with the Principle? Describe (in specific terms) the state

characteristics of a CSD that fully meets the requirements of the Principle.

"Comprehensive" Risk policy and FrameworkEffective control systems that mitigate against realization of RisksInsuranceReview and revision of use of funds/budgets/forecasts Recourse to Shareholders Cost cutting exercisesBoard awareness - capitalization policy / Sufficient capital to support/ dividend policies  

 

2. In relation to the Key Considerations for the Principle, what metrics/data should a CSD compile in order to demonstrate compliance? How might this data be sourced?

Budget reviews - timely and regularKey indicators need to be:-CSD specificOffer independence - what you can't measure you can't manageBoard has applied their mindsEconomic indicators - International Sharing of Risk factors

 

Working Group # 7Principle # 15General Business Risk

3. What “result levels" with respect to these metrics/data should a CSD achieve in obtaining "compliance"? Why? 

Ability for ACSDA members to share but understand why these numbers may be differentBenchmarkingKnow what we want to measure… Balanced Scorecards / Lead Indicators

Working Group # 7Principle # 15General Business Risk

4. What, if any, provisions should you (as an FMI) be making to ensure continued adherence to the principle (s), for example in times of market or operational distress?

In times of war… plans are the first casualty of battleContingency planningTestingGood governance principles and policies   

Working Group # 7Principle # 15General Business Risk

1. What constitutes "compliance" with the Principle? Describe (in specific terms) the state characteristics of a CSD that fully meets the requirements of the Principle.

Sound Investment policyQuality of investmentLiquidity profileSegregation of assets

 

Working Group # 7Principle # 16Custody and Investment Risk 

2. In relation to the Key Considerations for the Principle, what metrics/data should a CSD compile in order to demonstrate compliance? How might this data be sourced?

Control standards for Participants - verified by External AuditorsKnow what we want to measure… Balanced Scorecards / Lead Indicators

 

Working Group # 7Principle # 16Custody and Investment Risk 

3. What “result levels" with respect to these metrics/data should a CSD achieve in obtaining "compliance"? Why? 

No standard but organization-specific - ideally need to start building up data in order to be able to map trends going forward 

Working Group # 7Principle # 16Custody and Investment Risk 

4. What, if any, provisions should you (as an FMI) be making to ensure continued adherence to the principle(s), for example in times of market or operational distress?

In times of war… plans are the first casualty of battleContingency planningTestingGood governance principles and policies  

Working Group # 7Principle # 16Custody and Investment Risk 

1. What constitutes "compliance" with the Principle? Describe (in specific terms) the state characteristics of a CSD that fully meets the requirements of the Principle.

In addition to many of the issues listed under 15 we also need to include:- Appropriate operational resilience - Robust, effective Business Continuity PlanningComprehensive assessment of interdependencies - up and down! 

 

Working Group # 7Principle # 17Operational Risk  

2. In relation to the Key Considerations for the Principle, what metrics/data should a CSD compile in order to demonstrate compliance? How might this data be sourced?

Control standards for Participants - verified by External AuditorsKnow what we want to measure…Balanced ScorecardsLead Indicators

Working Group # 7Principle # 17Operational Risk  

3. What “result levels" with respect to these metrics/data should a CSD achieve in obtaining "compliance"? Why? 

No standard but organization-specific - ideally need to start building up data in order to be able to map trends going forward 

Working Group # 7Principle # 17Operational Risk  

4. What, if any, provisions should you (as an FMI) be making to ensure continued adherence to the principle(s), for example in times of market or operational distress?

In times of war… plans are the first casualty of battleContingency planningTestingGood governance principles and policies  

Working Group # 7Principle # 17Operational Risk