French Monetary and Financial Code
In forceI.-Investment firms shall have robust strategies, policies, processes and systems in place to identify, measure, manage and monitor the following:
1° The significant causes and effects of risks to clients and any significant impact on own funds;
2° The significant causes and effects of risks to the market and any significant impact on own funds;
3° The significant causes and effects of risks to the investment firm, in particular those which may reduce the level of available own funds;
4° The liquidity risk over adequate periods of different lengths, including over the course of a day, so as to ensure that the investment firm maintains adequate levels of liquid resources, including to meet the significant causes of the risks referred to in 1°, 2° and 3°.
The strategies, policies, processes and systems shall be proportionate to the complexity, risk profile and scope of activity of the investment firm and to the risk tolerance level set by the management body and shall reflect the importance of the investment firm in each Member State in which it operates.
The board of directors, the supervisory board or any other body performing equivalent supervisory functions shall approve and regularly review the strategies and policies relating to the risk appetite of the investment firm and to the management, monitoring and mitigation of the risks to which it is or may be exposed, taking into account the macroeconomic environment and the business cycle of the investment firm.
II -If the investment firm is to wind up or cease its activities, the Autorité de contrôle prudentiel et de résolution shall require that, taking into account the viability and sustainability of its business models and strategy, it consider the requirements and resources to ensure that own funds and liquid resources are maintained at a sufficient level during the exit process.
III - By way of derogation from the provisions of Article L. 533-24-2, Class 3 investment firms have robust strategies, policies, processes and systems for detecting, measuring, managing and monitoring the items indicated in 1°, 3° and 4° of I.
IV - The Minister responsible for the economy shall issue an order specifying the conditions for applying the strategies, policies, processes and systems for detecting, measuring, managing and monitoring risks, and the way in which the firm reports on the implementation of these strategies, policies, processes and systems to the Autorité de contrôle prudentiel et de résolution.
