2
Related Party Transaction Risk
2.1
A firm must enter into transactions with related parties at market value or on terms no more favourable than would be agreed if the transaction was not with a related party.
- 01/02/2014
2.2
2.1 does not apply to beneficial terms that are part of an overall remuneration package such as favourable interest rates for employee loans.
- 01/02/2014
2.3
A firm must establish, implement and maintain effective policies and procedures to identify, evaluate and manage risks arising out of transactions with its related parties.
- 01/02/2014
2.4
- (1) prevent a related party from taking part in the firm’s decision making process in relation to any transactions with that related party;
- (2) set a materiality threshold above which transactions with related parties receive prior approval from the firm’s management body;
- (3) ensure that the firm records and monitors the details and amounts of any related party transactions using an independent credit review or audit process; and
- (4) only permit exceptions to those policies and procedures if reported to the firm’s senior management or management body as appropriate.
- 01/02/2014
2.5
A firm must provide the PRA with details on aggregate exposures to related parties if requested by the PRA. The details must be provided by the date set by the PRA at the time of the request.
- 01/02/2014