4:64 Where necessary, the statutory governing body should set up specialised committees to analyse specific issues and advise it thereon. The creation of such committees may not undermine the role of the statutory governing body: decisions are always taken by the statutory governing body, which exercises its powers as a collective.

4:65 In order to enhance the effectiveness of oversight and supervision of the firm’s activities, operations and risk profile by the statutory governing body, Article 24 of the Brokerage Supervision Act provides that two specialised committees should be set up within this body:^[1]

• a risk committee and
• a remuneration committee.

4:66 When the NBB finds that a firm is significant in terms of its size, internal organisation or the nature, scale and complexity of its activities, it may request, pursuant to Article 24 §2 of the Brokerage Supervision Act, the establishment of audit and nomination committees or a single committee to carry out the tasks assigned to the audit and risk committees and/or a single committee that carries out the tasks assigned to the remuneration and nomination committees.^[2] If the NBB does not exercise this prerogative, the functions assigned to the audit committee shall be exercised by the risk committee^[3] while those assigned to the nomination committee shall be exercised by the remuneration committee.

4:67 A stockbroking firm may also establish an audit committee on a voluntary basis.^[4]

^{[1]  Except for small stockbroking firms which are exempt pursuant to Article 25 of the Brokerage Supervision Act (see Section 4.1.4.4 of this manual).}

^{[2] The option for the NBB to require the establishment of an audit committee and a nomination committee or an audit and risk committee and/or a nomination and remuneration committee does not apply to small stockbroking firms (unlike the option to require the creation of a management committee).}

^{[3] For example, monitoring the work of the internal audit function and monitoring the statutory audit of the accounts and the recommendations made by the statutory auditor fall within the tasks of the risk committee.}

^{[4] If a stockbroking firm creates an audit committee and/or a nomination committee, either voluntarily or at the request of the NBB, the rules governing the composition and tasks of these committees are those set out in Article 7:99 §4 CAC, to which Article 26 of the Brokerage Supervision Act refers, for the audit committee and/or those set out in Article 31 of the Brokerage Supervision Act, for the nomination committee. The procedural rules set out in this manual also apply to these committees.}