SUMMARY
Avantage Reply reviewed extensively the client’s IFR reporting practices and suggested improvements, where relevant.
The client received feedback from the regulator concerning the method of calculating K-Factors for its own funds requirement. As such, Avantage Reply provided a full-time senior consultant and a part-time Partner to support the client in reviewing its practises, when reporting IFR templates to the Luxembourgish regulator.
Also included, was providing regulatory analysis on topics where the client was not entirely certain of prudential requirements.
CUSTOMER GOALS
Following the feedback from the regulator, the client wanted to review its method of calculating K-factors and filling out the IF templates. Finally, the client also requested an analysis of related regulatory topics to understand how these impacted regulatory requirements. The K-factor calculation is an important variable as it is one of the methods used to calculate own funds requirements for investment firms under the IFR regulation.
CHALLENGES
The main challenge of the mission was to obtain enough information from the client on its business model, method of calculating K-Factors and filling out regulatory templates in a short period of time. All of this was needed to provide the client with a comprehensive analysis and recommendations on how to proceed with the reporting thereafter.
SOLUTION
Avantage Reply deployed senior resources with experience in regulatory reporting and prudential requirements. To address these challenges, the first step was to gain an understanding of the firm’s business activities and related risks. Then using a gap analysis, Avantage Reply assessed the existing IF templates against the latest regulatory requirements (IFR regulation, EBA ITS, etc). Once the gaps were identified and the regulatory analysis completed, Avantage Reply presented the results in the form of a matrix specific to their regulatory requirements and a memo.
CUSTOMER DESCRIPTION
The client is wealth management firm part of an insurance group in Luxembourg.