Timber by EMSIEN-3 LTD

Supervision

Our priority in supervising businesses, organizations and individuals is to ensure clients are at the center of an organizations business activities. Our aim is to deliver a sustainable programme of supervision with a market-based approach, rather than just simply concentrating on individual businesses, organizations and individuals. We seek to tackle risks before they cause harm. This is not to say we do not focus on an individual basis, we have a two tier process which ensures a wider net to offer the best protection for all.

We make risk-based judgments about whether the organization's business model and how it is run results in fair treatment for their customers and clients, and that it upholds market integrity and, for those businesses, organizations and individuals that we prudentially regulate, that it is structured and operating legally within our framework.

Conduct supervision

The CRT is responsible for supervising many businesses, organizations and individuals. We supervise the market using different approaches. The three main approaches are:

Column 1 – proactive supervision for the biggest businesses, organizations and individuals.
Column 2 – event-driven, reactive supervision of actual or emerging risks according to our risk appetite.
Column 3 – thematic work which focuses on risks and issues affecting multiple businesses, organizations and individuals or a sector as a whole.
We intervene early where we see poor behavior, taking action to prevent harm to businesses, organizations or individuals and their respective markets and secure redress where appropriate.

All authorized businesses, organizations and individuals have been allocated to one of two conduct categories:

Fixed portfolio

Fixed portfolio businesses, organizations and individuals have a named supervisor and are proactively supervised using a organization-specific continuous assessment approach. All these businesses, organizations and individuals are subject to a organization-specific supervisory strategy and an underlying work programme, which are evaluated at key governance checkpoints during the regulatory cycle. Column 2 issues are addressed in line with risk appetites and regulatory obligations, and businesses, organizations and individuals may also be included in Column 3 activity where appropriate.

Flexible portfolio

Flexible portfolio businesses, organizations and individuals are supervised through thematic and market-based work, along with programs of communication, engagement and education activity aligned to the key risks identified in the relevant sector.

Prudential supervision

As with our supervision of conduct, our prudential supervision goes beyond a quantitative analysis of businesses, organizations and individuals’ financial resources, business practice or operational structure. We consider systems and controls, governance arrangements, and risk management capabilities including the risk of misconduct.

In essence, we assess how well a firm understands the risks that it is running, and how well placed it is to manage those risks, and to avoid large, unexpected costs.

We allocate businesses, organizations and individuals that are solely regulated by the CRT to one of three prudential categories:

C1 - businesses, organizations and individuals whose failure would cause lasting and widespread financial and reputational damage to their customers, client assets and the marketplace beyond, are subject to periodic capital and, if applicable, liquidity assessment, conducted by our prudential specialists every 24 months.

C2 - businesses, organizations and individuals whose disorderly failure would damage consumers and client assets but are more easily dealt with than the failure of a C1 business, organization or individual. They are subject to periodic capital and, if applicable, liquidity assessment, conducted by our prudential specialists every 48 months.

C3 - businesses, organizations and individuals whose failure, even if disorderly, is unlikely to cause any significant harm to consumers or market integrity. These businesses, organizations and individuals are supervised on a reactive basis.

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