4:73 The duties of the risk committee are set out in Article 27 of the Brokerage Supervision Act and further specified in EBA/GL/2021/14. Thus, the risk committee should at least:

1. advise and support the statutory governing body in its supervisory function with regard to monitoring of the firm’s overall current and future risk strategy and appetite;
2. assist the statutory governing body in the exercise of its supervisory function and particularly the non-executive directors in overseeing implementation of the firm’s risk strategy and the corresponding limits that have been set;
3. oversee implementation of the firm’s strategies for capital and liquidity management as well as for all other relevant risks;
4. provide the statutory governing body, in its supervisory capacity and particularly the non-executive directors, with recommendations on necessary adjustments to the risk strategy;
5. advise on the selection of any external consultants the supervisory function may decide to engage for advice or support;
6. review various possible scenarios, including stressed scenarios, to assess how the firm’s risk profile would react to external and internal events;
7. oversee the alignment between all material financial instruments offered to customers and the business model and risk strategy of the firm;
8. evaluate the recommendations of the risk management and compliance functions as well as, in the absence of an audit committee, those of the internal audit function and the statutory auditor and monitor the appropriate implementation of the measures taken;
9. ensure that the services offered to customers take into account the risks incurred by the firm in view of its business model and risk strategy, in particular those - especially reputational risks - that could arise based on the types of products offered to customers; where this is not the case, the risk committee should provide an action plan to the statutory governing body; and
10. assess whether the incentives in terms of variable remuneration take suitable account of the firm’s risk management, capital requirements and liquidity position, as well as the probability and staggering of profits.

4:74 For more information, please see paragraphs 59 and 60 of EBA/GL/2021/14.