Guidelines and Technical standards, Investor protection : Joint EBA and ESMA Guidelines on common procedures and methodologies for the supervisory review and evaluation process (SREP)

EBA/GL/2022/09 ESMA35-36-2621 20/07/2022 Final Report Joint EBA and ESMA Guidelines on common procedures and methodologies for the supervisory review and evaluation process (SREP) under Directive (EU) 2019/2034 Contents 1. Executive Summary 4 2. Background and rationale 6 3. Guidelines 17 Title 1 General provisions 19 Title 2 The common SREP 24 2.1 Overview of the common SREP framework 24 2.2 Scoring in the SREP 27 2.3 Organisational arrangements 29 2.4 Proportionality and supervisory engagement 30 Title 3 Monitoring of key indicators 34 Title 4 Business model analysis 36 4.1 General considerations 36 4.2 Preliminary assessment 37 4.3 Identifying the areas of focus for the BMA 38 4.4 Assessing the business environment 39 4.5 Analysis of the current business model 39 4.6 Analysis of the strategy 41 4.7 Assessing business model viability 41 4.8 Assessing the sustainability of the investment firm’s strategy 42 4.9 Identification of key vulnerabilities 42 4.10 Summary of findings and scoring 43 Title 5 Assessing internal governance and investment firm-wide controls 46 5.1 General considerations 46 5.2 Overall internal governance framework 48 5.3 Organisation and functioning of the management body 51 5.4 Remuneration policies and practices 51 5.5 Internal control framework and functions 52 5.6 Risk management framework 54 5.7 ML/TF risks and prudential concerns 58 5.8 Information and communication...