Investment firms are required to publicly disclose certain information to allow investors and other stakeholders to compare different firms’ risk profiles and make informed decisions.
The disclosure requirements require firms to publicly report on risks to their financial position, capital and liquidity. Different disclosure requirements apply to the different classes of firms, as summarised below:
S-NII Firm Disclosures
S-NII firms that issue Additional Tier 1 instruments must publicly disclose certain information on the same date as the annual financial statements are published, including:
- Risk management objectives and policies, including a summary of their risk management strategies and processes and a concise risk statement.
- A full reconciliation of their regulatory own funds and the balance sheet in their audited financial statements.
- A description of the main features of the instruments issued by the firms.
- A description of any restrictions applied to the calculation of the firms’ own funds and the instruments and deductions to which those restrictions apply.
- A summary of the approach used to assess the adequacy of internal capital, as well as the firms’ K-factor requirements and fixed overheads requirements.
Non-SNII Firm Disclosures
In addition to the above, non-SNII firms must publicly disclose the following information on the same date as they publish their annual financial statements:
- Details in relation to their internal governance arrangements, including the number of directorships held by each member of the management body, the firms’ policies on diversity with regard to senior management selection, and details around their risk committee (where applicable).
- Details in relation to their remuneration policy and practices, including aspects related to gender neutrality and the gender pay gap and details around the remuneration of material risk takers.
Non-SNIIs that meet certain criteria with respect to their on and off-balance sheet assets must also disclose:
- Details around their shareholding and voting behaviour.
- Information around environmental, social and governance (ESG) risks.