We provide further observations on how firms are implementing requirements on the Internal Capital Adequacy and Risk Assessment (ICARA) process and reporting under the Investment Firms Prudential Regime (IFPR). We also summarise good and poor practices. Firms should consider these and how they can strengthen their processes.
1. Who will this interest
This multi-firm review will be of interest to:
- all MIFIDPRU investment firms (also referred to as ‘firms’ in this publication)
- the UK parent entities of investment firm groups, in scope of the IFPR
2. What you need to do
Following on from our February 2023 publication IFPR implementation observations: quantifying threshold requirements and managing financial resources, we provide further observations on how firms are implementing the IFPR in relation to the ICARA process. We also include a summary of good and poor practices.
None of the following changes FCA policy. Firms should refer to our rules and guidance on assessing adequate financial resources under the Prudential sourcebook for MiFID Investment Firms (MIFIDPRU) and review these observations, to help them understand our existing policy. They should consider whether to apply any of these observations to their own processes.
3. Executive summary
The IFPR and the corresponding prudential standards under MIFIDPRU began on 1 January 2022. IFPR applies to investment firms engaged in MiFID (Markets in Financial Instruments Directive) activities such as fund managers, asset managers, investment platforms, firms which deal on their own account, depositaries, and securities brokers. The IFPR introduced a requirement for all firms in scope of the regime to complete an ICARA process. Through the ICARA process, firms identify the risk of harm in their operations and assess appropriate resources to mitigate harm, whether as a going concern or when winding down.
To support firms as they adapt to the new prudential standards, we carried out a multi-firm review to assess the progress of firms in adopting the new regulatory regime, including the conduct of their ICARA processes.
We focused on:
- capital adequacy
- liquidity adequacy
- wind-down planning under the ICARA process
If these are appropriately considered, managed, and structured, customers and financial markets can have greater confidence that firms can address harms from their operations, mitigate them and reduce harm in firm failure. The review supports our commitment within our 3-year strategy to reduce and prevent serious harm and to reduce harm in firm failure.
We also took some account of how firms were reporting under MIFIDPRU. The wider context of our review and our review approach was further discussed in our February 2023 publication.
Firms have made progress in understanding the requirements of the new regime. We saw a deliberate shift toward considering and seeking to mitigate the harm the firm can pose, particularly to consumers and markets. However, we found some areas for improvement. In addition to those cited in our initial observations, our review highlighted the following (see box):
- Several firms applied insufficient consideration of cashflows and liquidity stresses, which led to an inadequate assessment of liquid asset requirements. These firms were at risk of running out of cash in stressed conditions, which could have resulted in firm failure.
- For most firms, internal intervention points were not structured in a way that would ensure that actions would be triggered in a timely fashion to mitigate harm particularly from firm failure.
- Wind-down assessments applied inadequate consideration of the impact of membership in a group. Individual firms within groups may not have adequately planned for potential failure.
- In some firms, there were significant failings in the application of capital models for operational risk. This gives little assurance that these firms have adequate resources to mitigate harm.
These are discussed in full under key observations. Firms that are part of our multi-firm review receive written feedback letters. We will follow up with them through our usual supervisory activities.
4. Key observations
4.1. Liquid asset assessments
Inadequate consideration of stressed conditions makes firms unprepared to immediately address liquidity strain
MIFIDPRU 6 imposes a minimum liquidity requirement on all firms. Through the ICARA process in MIFIDPRU 7, firms must produce a reasonable estimate of the amount of liquid assets that the firm would require to support on-going operations, including in stressed conditions, or an orderly wind-down. While firms assessed their liquid asset requirements through the ICARA process, we saw that some firms did not adequately apply the guidance provided by MIFIDPRU to consider periods of financial stress.
Liquidity stresses are circumstances which accelerate or increase the magnitude of cash outflows from the firm, or cause reductions in available sources of liquid assets or funding. They have an immediate impact on firms leaving little time to find alternative options. Firms that do not hold sufficient liquid assets to support them in a stress may find themselves unable to meet their obligations as they fall due. This can cause harm to stakeholders, clients and potentially markets. Liquidity strain has precipitated some of the largest crises in finance.
In assessing adequate liquid assets to fund on-going operations, some firms did not assess cashflows under stressed business conditions. Some applied stresses that were not particularly relevant to their cashflows and liquid asset positions. Others applied only a subset of the liquidity stresses applicable to their business model. We also saw that the severity and breadth of liquidity stresses considered by some firms did not capture recent stress and volatility in relevant markets. A few firms did not apply a forward-looking assessment as required by MIFIDPRU. MIFIDPRU 7 Annex 1 includes circumstances which may give rise to liquidity stresses. Firms should use this for further reference.
Under MIFIDPRU 7, firms must also consider relevant severe but plausible stresses that could affect the firm’s business model and consider whether they would have sufficient resources to minimise harm in those circumstances. In line with this, firms should also ensure that they regularly review their stress assessments and proactively adjust their liquid asset levels with changes in the external market. However, most firms have not adopted the practice of having such regular reviews and adjustments.
Recent events have highlighted the importance of adopting this practice. The financial markets have been affected by heightened geopolitical risks and a challenging macroeconomic environment. There have been periods of rapidly escalating and sustained volatility, and higher prices in some markets. These lead to substantial margin calls, higher costs, credit stresses and increased counterparty risks for some firms. The impact of volatility in one market also tends to spill over to others, eventually being felt by other firms.
Unless firms anticipate stress conditions, regularly review their stress assessments and liquid asset requirements in line with external events, they cannot ensure that they have enough liquid asset resources to meet their obligations as they fall due.
Lack of time-granular analysis of cash flows leads to inadequate understanding of cash needs and impairs resilience
MIFIDPRU guides firms to identify gaps in funding when considering the liquid assets required to fund its on-going business or to facilitate an orderly wind-down. Many firms have business models with significant intra-day or inter-day funding gaps or increases in liquid asset requirements during a stress or a wind-down situation. However, many of these firms used only monthly and quarterly analyses of stressed cashflows. These are insufficiently time-granular to understand and plan for the prompt mitigation of their liquidity stresses.
The absence of appropriately time-granular analyses will not identify mismatches in the flow of cash which cause a peak cash requirement within the day, week, month, or quarter. Understanding the potential peak requirement is particularly important when the firm is winding down since further funding sources become less available. The firm will be unable to ensure that it will remain resilient and meet its obligations as they fall due, especially when winding down, unless it thoroughly understands the timing and magnitude of its peak cash requirement in a stress.
Failure to distinguish the analysis of liquid assets from the analysis of own funds leads to inadequate assessment of resources required to mitigate harm
Firms are assessing the liquid assets required to support an orderly wind-down. However, we saw that some firms failed to distinguish the analysis needed to assess own funds resources, from the analysis needed to assess liquid asset resources. Some firms used the same analysis for both.
The assessment of adequate liquid asset resources focuses on items which affect cash or sources of cash. In contrast, the assessment of adequate own funds resources reviews impacts on the value of the firm’s assets, liabilities, and capital accounts without necessarily increasing or reducing cash or sources of cash. Without understanding this difference, firms are unable to ensure that they would have adequate liquid resources to support an orderly wind-down.
4.2. Early warning indicators, triggers, and interventions
The lack of adequately assessed internal early warning indicators and triggers for intervention do not enable firms to take timely action to mitigate harm
As outlined in Finalised Guidance (FG20/1), we expect firms to anticipate problems, take effective steps to prevent them and rectify problems when they occur. Early warning indicators and triggers for action help firms identify when their resilience is weakening and make interventions at the appropriate time. It is essential that they are a part of their framework to manage resources so that they identify, before the point of critical stress, when they may need to intervene.
Separately, MIFIDPRU specifies an early warning indicator (EWI) for own funds and wind-down triggers which require notification to and may result in intervention by the FCA, as explained in MIFIDPRU 7.6.14G - 7.6.15G (for own funds) and MIFIDPRU 7.7.16G - 7.7.17G (for liquid assets). These are calibrated to allow the FCA time to prepare any actions we may choose to undertake and have no relevance to the timelines needed for firms’ own actions. A firm acting prudently is likely to set internal EWI and triggers above the level specified for notifying the FCA.
MIFIDPRU also guides firms to define their own internal framework for managing financial resources consistent with their own analysis and assessments from the ICARA process. It also guides firms to consider severe but plausible stresses to identify the appropriate level of resources when internal action is taken. Stress tests help firms understand to what extent own funds and liquid assets can be depleted under stress, and over what period.
We note that to manage stress, firms generally identify 2 main internal intervention points. First, the activation of the recovery plan and second, the activation of the wind-down plan. In many cases, the point at which firms plan to consider activating the wind-down plan is when their own funds and/or liquid asset resources have already fallen below levels needed to support an orderly wind-down. We do not consider this to be consistent with acting with due care and diligence.
On-going stress may further deplete resources while discussions are held, and preparations are made. There is a danger that by the time the wind-down plan is executed, remaining resources may no longer be enough to enable an orderly wind-down.
We also saw that some firms did not consider the interaction of these 2 internal intervention points with their threshold requirements. Nor did they consider these in deciding how much resources to hold in excess. Under MIFIDPRU, particularly among larger firms, if the amount of resources to support an orderly wind-down are higher than resources to support on-going operations, that amount will usually be the threshold requirement.
In such cases, if the firm does not identify the right time to internally intervene and the right amount of resources to hold above their threshold requirement, there is a risk that a relatively mild stress may quickly force the firm to wind-down. The firm may also find itself with insufficient resources to wind-down when a severe and plausible stress event happens. This is more likely when wind-down resources drive the threshold requirements but can also arise when resources to support on-going operations are not materially higher than the resources to support an orderly wind-down.
We also saw that only a few firms made effective use of stress testing to identify by how much resources should exceed threshold requirements in unstressed conditions, or to test the appropriateness of the setting of levels of resource in their risk appetite framework.
Since stressed conditions may also change threshold requirements, a few firms used the combined impact of stress on resources available and on resources required. This combined effect identified changes in surplus resources. The largest change in surplus resource was used to define a resource buffer which the firm considered prudent to hold and maintain above their threshold requirement. This buffer level is often higher than the level corresponding to the MIFIDPRU-defined EWI. These firms also monitored the buffer levels and identified them as internal intervention points which trigger corresponding escalation and action.
Internal points of intervention and action based on an understanding of the business through stress testing, and the maintenance of a resource buffer are prudent practices in managing financial resources. These approaches are consistent with our expectations under FG 20/1 and the requirements under MIFIDPRU. Unless a firm identifies appropriate internal EWIs, intervention points and resource buffers based on stress tests, there is a risk that it may not take appropriate action at the right time. It will then struggle to maintain adequate resources to remain viable, and, more importantly, to support an orderly wind-down.
4.3. Wind-down plans
Little consideration of the role of group relationships potentially leads to inadequate assessment of resources to support an orderly wind-down
Group membership creates governance and operational relationships which, under MIFIDPRU, should be considered in wind-down planning. Firms which completed ICARA processes on an individual basis gave due attention to the steps involved in winding down its operations and the roles which need to be carried out within the firm. However, some have not considered the involvement which may be required from group governance and have not considered group-wide risk appetite statements.
While individual firms operate autonomously, the wind-down of a firm which is part of a wider group is rarely an independent exercise. Group-wide risk appetite and governance may accelerate or delay wind-down processes. Unless these are considered, the individual firm is unable to comprehensively assess adequate resources needed to support its orderly wind-down.
Insufficient consideration of group-wide wind-down plans may lead to incomplete assessment of harms to be mitigated
Where firms completed the ICARA process on an individual basis and prepared individual wind-down plans, plans did not always recognise that the wind-down may have been caused by, or may cause, the wind-down of other firms in the group or the entire group itself.
Situations where some or all firms in the group are also winding down may create pressures on shared systems, people, and financial resources. These may require additional resources or alternative supplier arrangements which may have cost and timing consequences on an individual firm’s own wind-down plan. A group wind-down may also change the roles performed by senior managers and the Board of each individual firm, with decisions potentially being made at group level. Planning how to address these pressures and changes will give the firm greater assurance that its wind-down will be orderly.
Among firms which prepared wind-down plans individually, we also found cases where there were inconsistencies with the wind-down plans of other firms in the wider group and a failure to identify critical dependencies on group entities. This was less common where the wind-down planning process considered the whole group.
Firms which belong to a group should consider whether also preparing group wind-down plans would result in a more thorough assessment of required resources. A group wind-down plan enables consistency in assumptions and identifies critical dependencies across firms in the group. It also clarifies how shared resources will be made available to individual firms and the roles to be performed by senior management and Boards of the individual firms.
Where applicable, individual firms should also consider any group-wide resolution plans and wind-down triggers in their own planning. Without this broader view, the individual firm’s understanding of the resource implications of a wind-down will not be comprehensive and there will be no assurance that potential harms will be appropriately mitigated.
4.4. Operational risk capital assessments
Significant failings in the application of operational risk capital approaches may lead to insufficient resources to mitigate harm
We saw that many firms assessed operational risk capital using approaches that did not lead to adequate assessments of own funds for individual firms. Common failings include an incomplete assessment of risk from the point of view of an individual firm, inappropriate use of group models, and poor governance and oversight around complex modelling approaches. Further details of good and poor practices are in Annex 1.
An incomplete assessment of risks means that individual firms will not have enough resources to manage their own risks. The lack of adequate model risk governance caused some firms to use incorrect models or relatively complex approaches which led to incorrect or poorly understood results. Unless models are used appropriately and the results clearly understood, the firm does not have assurance that its resource assessment is adequate.
MIFIDPRU 7 requires that the management body of firms must ensure that adequate resources are allocated to the management of all material risks and to the use of internal models for those risks. Putting in place model risk governance, where models are used, helps ensure that any modelling approach remains fit for purpose. Without adequate oversight over model risk, firms cannot confirm that they hold the correct resources to mitigate harm from their operations.
5. Good and poor practices
To help MIFIDPRU investment firms consider our observations, we provide a summary of good and poor practices we have seen, as noted here and in our February 2023 publication. This is presented in Annex 1. Firms should also consider good and poor practices cited in our Observations on Wind-Down Planning and Assessing liquidity for orderly wind-down.
Our publications only include key observations. Firms should continue to develop their ICARA process to adopt practices which improve on those contained in our publications.
6. Annex 1: Good and poor practices observed
6.1. Group ICARA processes
- Firms which completed a group ICARA process included a clear assessment of the risks of each individual firm, and their contribution to the assessment of adequate resources for each entity.
- Where a group wind-down plan was prepared, the activities and costs relevant to each individual firm was also thoroughly assessed.
- There was clear delineation within the ICARA document of the assessment and participation of each MIFIDPRU entity, how the legal entity Boards have challenged the overall document and where the group had taken responsibility for the collation and calculation of the group element.
- For firms which opted to complete a group ICARA process, group level numbers were not adjusted to eliminate the impact of intragroup offsets after they were allocated to the individual firms. There was also no clear consideration whether the allocation was appropriate.
- Where group wind-down plans were prepared, resources were allocated based on proxies such as revenue contribution. There was no clear link to the specific actions required to wind-down each individual firm to mitigate firm-specific harms.
- ICARA process on a ‘consolidated basis’ was completed without a prior agreement with the FCA to have a voluntary requirement (VREQ) to submit MIF007 on a consolidated basis.
- Where an ICARA process was completed on a ‘consolidated basis’, an ICARA process for each individual MIFIDPRU investment firm was not completed.
6.2. ICARA process
- Threshold requirements were based on joined-up assessments with clear consistencies in the analysis of own funds, liquid assets, wind-down planning, and stress testing.
- A holistic assessment of harms from the firm’s operations was completed. Resources to mitigate harms not covered by K-factors were considered in the assessment of adequate resources.
- ICARA assessments were not linked and integrated with each other. For instance, there was a mismatch in risks assessed and the risk management process used.
- There was no holistic consideration of the harms from operations. The assessment of adequate own funds resources was confined to harms covered by K-factors.
- Wind-down planning resource assessment was not considered in the assessment of threshold requirements.
- Capital previously held for risks, such as credit or market risk, was significantly reduced or removed without adequate justification.
- Wind-down planning resource assessment was not considered in the assessment of threshold requirements.
6.3. Early warning indicators, triggers, and interventions
- The risk appetite and trigger framework for managing own funds and liquid assets were based on the behaviour of financial resources under stress.
- Insight from stress testing was used to provide an appropriate resource buffer to ensure adequate resources are maintained or to wind-down fully in an orderly way. A time limit for arriving at decisions when the buffer is breached was also defined.
- The firm identified internal early warning indicators, before the point of critical stress, when the firm may need to intervene. These levels were above the level where FCA notification was required.
- The firm considered the recovery plan and wind-down triggers in relation to threshold requirements and in deciding how much resources to hold in excess.
- Stress tests were back tested against recent market stress events.
- There was a clear identification and communication of actions needed at each intervention point.
- Own funds and liquid asset appetite thresholds and triggers merely used levels defined in MIFIDPRU without any link to the firm’s understanding of its risk.
- Firm’s own assessment of own funds and liquid assets needed to support an orderly wind-down was missing from the metrics monitored.
- There was no adequate assessment of risk, and the assessments did not inform the risk appetite, the trigger and limit framework, or the choice of the stress scenarios.
- Reverse stress testing was not used to test the trigger and limit framework or inform the choice of the scenario used to assess wind-down resource requirements.
- There was lack of clarity whether intervention points lead to discussion, trigger specific actions, or immediately set in motion tougher measures such as invoking the wind-down plan.
- Where the own funds threshold requirement (OFTR) and the liquid assets threshold requirement (LATR) were driven by resources needed to support an orderly wind-down, the framework to manage resources was not sufficiently robust to consider that there is no room for further stress once the threshold requirements were breached.
- The action to consider activating the wind-down plan is when own funds and/or liquid asset resources have already fallen below levels needed to support an orderly wind-down. There was no recognition that ongoing stress may further deplete resources while discussions are held, and preparations are made.
- The interaction of internally assessed recovery plan and wind-down triggers with the threshold requirements was not considered. Nor were they used in deciding the amount of resources to hold in excess of threshold requirements.
- There was no effective use of stress testing to identify how much more resources should exceed their threshold requirements, in unstressed conditions, or to test the appropriateness of the setting of levels of resource in their risk appetite framework.
6.4. Assessment of liquid asset requirements
- Cash requirements were assessed both under normal conditions and under stress. Assessments were forward-looking as required by MIFIDPRU.
- Liquidity stresses included potential market-wide strain on funding sources as well as firm-specific events which can give rise to higher cash requirements or cause the firm’s funding sources to be cancelled.
- The choice of the liquidity stresses thoroughly considered activities, exposures, and obligations specific to the firm.
- The assessment of liquidity risk included detailed intra-day, inter-day, weekly, and monthly projections of cash-flows under stress, appropriate to the firm’s business model, to identify potential cash shortfalls and timing mismatches.
- The time intervals used to analyse stressed cashflows were granular enough for management to demonstrate that they had operable plans to cope with and mitigate instantaneous liquidity risks.
- There was a regular review of stress assessments and proactive adjustment of liquid asset levels to meet the challenges of a rapidly changing economic environment.
- Assessment of liquid asset threshold requirements did not consider periods of financial stress.
- Where stress periods and events were considered, stresses applied were not particularly relevant to their cashflows and liquid asset positions or applied only a subset of the liquidity stresses applicable to their business model.
- No application of the forward-looking assessment required by MIFIDPRU.
- Severity and breadth of liquidity stresses considered were not aligned with the recent stress and volatility in relevant markets.
- No practice of regularly reviewing stress assessments and proactively adjusting liquid asset levels to meet the challenges of a rapidly changing economic environment.
- The assessment of own funds and liquid assets needed to support a wind-down was identical.
- Insufficient consideration was given to the actual liquidity stresses faced by the firm leading to the same stress tests used for both capital stress testing and liquidity stress testing.
- For firms with significant intra-day or inter-day funding gaps or increases in liquid asset requirements during stress or a wind-down situation, the time intervals used to analyse stressed cashflows were limited to monthly or quarterly cashflows. These were insufficiently time granular to understand and plan for the actual timings and prompt mitigation of liquidity stresses specifically intra-day and inter-day stresses.
6.5. Operational risk capital assessments
- There was clear linkage between enterprise risk assessment, the risk control self-assessment (RCSA) process, scenario analysis and operational risk assessment.
- The approach applied in assessing operational risk capital for an individual legal entity excluded any consolidation or diversification effects across different legal entities.
- The limitations of operational risk models (where used) were evaluated, and the approach applied was suited to the data available and the circumstances of the individual firm.
- Approaches were well understood, and results suited to the risks of the individual firm.
- Where a source of operational risk, for instance, cyber risk, was a potential trigger of several risks, there was a process to ensure risk assessments are comprehensive.
- Model risk governance, where models are used, was in place.
- The firm applied a policy of regular independent validation of operational risk models and approaches used to assess own funds requirements. Model validation was performed with changes on how the model was used.
- Subject matter experts were asked to assess loss scenarios which they can reasonably encounter in their career or lifetime (for instance, which may happen once in 40 years). Mathematical models were applied to use this information to extrapolate the loss, on which the capital was based, which happens less frequently (for instance, once in 200 or more years).
- The approach applied in assessing capital of an individual firm to mitigate harm from operational risk did not thoroughly consider the risks sustained by the individual firm.
- Firms, which were part of larger firm groups, used group operational risk models in individual ICARA processes without further examining whether these were fit for use by an individual firm.
- Operational risk approaches included complicated methodologies around the attribution of risks and harm which eventually led to a poor assessment of adequate resources. Others applied assumptions (for instance, scenario correlations) which were not fully explained or verified.
- Model execution was accompanied by operational missteps such as code errors, incorrect estimation of inputs, or inputting errors.
- Operational risk models were not independently validated for use by an individual firm.
- There was inadequate rationale for excessive diversification benefit (low correlation) particularly when only a subset of the identified material risks was used to estimate the capital.
- Group models were used by individual firms without going through the firm’s model risk governance to confirm appropriateness of application. Independent model validation performed explicitly removed from its scope the use of the model by an individual MIFIDPRU investment firm.
- Operational Risk models continued to be a black-box tool with the firm not able to ascertain the adequacy of the numbers they were feeding the model and what the model output was telling them.
6.6. Wind-down planning process
- Wind-down plans considered a backdrop of stress which informed the level of resources required.
- Wind-down plans thoroughly covered requirements of the firm’s operations, including products, geographies, activities, and obligations specific to the firm.
- Wind-down plans were sufficiently detailed to identify business as usual costs, wind-down driven costs, and cashflow mismatches.
- Wind-down plans were tested through simulations or ‘war games’.
- The framework for managing resources in a wind-down was comprehensive including points where initial or more extreme action is taken, and where the wind-down is activated.
- In addition to formal triggers on capital and liquidity, firms also used non- financial triggers, for instance, on reputational risk or key client concentration.
- For firms which are part of a wider group, wind-down plans made appropriate consideration of group wind-down or resolution plans and any trigger points contained therein.
- For firms within groups, consideration was given to the order with which the affected legal entities would be wound down.
- Wind-down plans had not been updated for years.
- Wind-down plans and cost assumptions were not aligned.
- Assumptions were unrealistic. In particular, the activation of the wind-down was assumed to take place under normal, instead of stressed, conditions. The possibility that liquid assets and own funds have been depleted by a prior stress when wind-down commences was not considered.
- The impact on financial resources did not consider stress conditions such as the fire sale of assets, the acceleration of liability payments or clients transferring businesses away from the firm at a faster rate.
- Group dependencies were not comprehensively considered and assessed.
- The impact of group wind-down plans on shared systems, costs and resources were not considered. The viability of service companies was not assessed.
- For firms belonging to a wider group of firms, wind-down plans did not consider the possibility that the wind-down was caused by, or causes, the wind-down of other firms in the group or the entire group.
- No consideration was made of the involvement which may be required from group governance, nor were any group-wide risk appetite statements considered.
- Wind-down plans prepared individually by firms that were part of a group of firms had inconsistencies with the wind-down plans of other firms in the wider group. They also did not consider group dependencies.
- Wind-down plans were not tested.
- Expectations outlined in FCA’s wind-down planning guide and Finalised Guidance 20/1 were not met.
6.7. Useability of the ICARA document and process
- ICARA document clearly highlighted the bases and drivers of threshold requirements and the appetite and trigger framework used to manage financial resources, with clear detailed discussions provided in appendices.
- There was a clear record of scenarios, assumptions, analysis, conclusions, and decisions made.
- There was an itemised breakdown of risk calculated (for instance, for credit risk, market risk, group risk) and harms assessed so that it is clear to the reader what risks/harms have been considered.
- There was a clear discussion of key changes in the assessments since the last iteration.
- The relevance of ICARA assessments was regularly reviewed. LATR assessments, for instance, are refreshed monthly, and in case of material changes in the business, and the competitive and market environment.
- The ICARA document had no clear summary of the drivers of threshold requirements and the stresses used to support the analysis.
- The reason for significant reductions in capital and liquid asset resource requirements was not discussed.
6.8. Data integrity
- There was consistency in the regulatory submissions and with the ICARA document, annual reports, and internal management information.
- Regulatory reports were completed fully and according to guides provided.
- Contents of MIF007 were inconsistent with the information provided in the ICARA, in annual reports and in internal management information.
- Guides on the completion of regulatory reports were not thoroughly followed. Several data points were left blank.