Pillar 3 disclosure


Registration No: 04039591

FCA Registration No: 195597

Disclosure policy

The Capital Requirements Directive (CRD) established a regulatory capital framework across Europe governing the amount and nature of capital investment firms must maintain. In the United Kingdom, the CRD was implemented by the Financial Conduct Authority (FCA) in its regulations through the General Prudential Sourcebook (GENPRU), Prudential Sourcebook for Banks, Building Societies and Investment Firms (BIPRU) and the Prudential Sourcebook for Investment Firms (IFPRU).

The FCA capital framework consists of three 'Pillars':

Pillar 1: sets out the minimum capital requirement for firms.

Pillar 2: requires firms, and the FCA, to assess periodically whether a firms Pillar 1 capital requirement is adequate to meet its firm-specific risks.

Pillar 3: requires firms to develop a set of disclosures which will allow market participants to assess key information about our underlying risks, risk management controls and capital position.

The FCA rules require for Pillar 3 disclosure to be made in a formal disclosure document. This document meets the obligation of the Company with respect to the Pillar 3 requirement. The rules provide that the Company may omit one or more of the required disclosures if it is believed that the information is immaterial. Materiality is based on the criterion that the omission or misstatement of any information would be likely to change or influence the decision of a reader relying on that information.

Where the directors of the Company (together ‘the Board’) have considered a disclosure to be immaterial, we have stated this in the document. In addition, we may also omit one or more of the required disclosures where we believe that the information is regarded as proprietary or confidential. In the view of the Board, proprietary information is that which, if it were shared, would undermine the Company’s competitive position. Information is considered to be confidential where there are obligations binding the Company to confidentiality with its customers, suppliers and counter parties.

The Company has made no omissions on the grounds that it is immaterial, proprietary or confidential.

Risk management policies

The Company is authorised and regulated by the FCA with permission to provide arranging and investment advisory services on behalf of professional clients and eligible counterparties.

The Board determines the Company's business strategy and risk appetite along with designing and implementing a risk management framework that recognises the risks that the business faces, both currently and in the future. They also determine how those risks are mitigated and assess, on an on-going basis, the arrangements to manage those risks.

The Board considers the current projections for profitability and regulatory capital management, business planning and risk management on a regular basis. This includes managing the Company's risks though a framework of policy and procedures having regard to relevant laws, standards, principles and rules (including FCA Principles for Business and the FCA rules) with the aim of operating a defined and transparent risk management framework. These policies and procedures are updated as required. The Company has an operational infrastructure appropriate to its size.

The Company's approach to managing risks applicable to its operations is set out below.

Interest rate risk

The Company's financial assets are not materially exposed to interest rate risk and the Company does not rely on interest bearing assets as a source of income for working capital purposes.

Market risk

Market risk is the risk that changes in market prices such as interest rates, equity prices and foreign exchange rates will affect the Company’s future cash flows or the carrying value of its holdings of financial instruments. The Company does not take positions which materially expose it to market risk.

Where the Company may, from time to time, hold assets denominated in currencies other than GBP, the Board have risk management procedures in place to manage this minimal risk.

Credit risk

Credit risk is defined as the risk of loss caused by the failure of a counterparty to perform its contractual obligations. The Company provides advisory services to its wider group and the Board consider that the key financial risk exposure faced by the Company relate to risk of non-payment of intra-group fees whilst maintaining the need to maintain sufficient liquidity to satisfy regulatory capital requirements and working capital needs. The Board monitors the group’s overall working capital needs and ensures that the Company is adequately funded at all times, therefore ensuring the Company has no material credit risk.

Liquidity risk

Liquidity risk is defined as the risk that the Company, although solvent, either does not have sufficient available resources to enable it to meet its obligations as they fall due, or can secure them only at excessive cost.

The Company maintains high levels of liquidity to ensure funds are readily available to manage trade creditors' liquidity risk and, more generally, to ensure that unforeseen working capital requirements are covered. The Board regularly monitor cash flow and management accounts to ensure regulatory capital requirements are not breached and that the Company maintains adequate working capital.

Foreign currency risk

The Company's potential risk arises on its exposures, from time to time, to US Dollars and Euros. The Company's income can, in part, be generated in both currencies. The Board is responsible for managing the Company's risk to foreign currency by monitoring the exposure on all foreign currency denominated assets and liabilities. The Board take a prudent approach by holding a healthy level of liquid resources to mitigate any significant fluctuations in the applicable exchange rates.

Operational and business risk

Operational risk, inherent in all businesses, is the potential for financial and reputation loss arising from failures in internal controls, operational processes or systems that support them. It includes errors, omissions, disasters and deliberate acts such as fraud. The regulated environment in which the Company operates imposes extensive reporting requirements and continuing self-assessment and appraisal.

Internal arrangements and processes are in place to continually re-evaluate as the Company seeks to improve its operating efficiencies and these are considered to have been effective to date. During the Covid-19 pandemic in 2020 and 2021, the Company took all reasonable steps to adapt working practices so that operations continued on an uninterrupted basis and its robust procedures ensured that business operations were largely unaffected despite the profound impact Covid-19 has had worldwide.

Dependence on key technical personnel

Part of the Company and wider group’s success is driven by its key technical staff in providing services to its target market, including the advisory services provided to fellow group companies. Therefore, the Board consider a key risk to be the loss of its key personnel and the retention of these individuals is a key objective of the Company through having competitive remuneration policies.

Capital Management

The Company is authorised and regulated by the FCA and is subject to specific regulatory capital requirements. The Company is not a member of a group for regulatory purposes and so is not subject to consolidated supervision and has no specific regulatory requirements.

Securitisation risk

Securitisation risk is the risk that the capital resources held by a firm in respect of assets which it has securitised are inadequate having regard to the economic substance of the transaction, including the degree of risk transfer achieved. This is not applicable to the Company, which does not securitise assets currently.

Pension obligation risk

Pension obligation risk is defined as the risk to a Company caused by its contractual or other liabilities to or with respect to a pension scheme (whether established for its employees or those of a related company or otherwise).

The Company currently runs a pension scheme for its employees, but the financial commitment on the Company is considered minimal and is not therefore greatly exposed to pension obligation risk.

Pillar 1 requirement

The Company is classified for regulatory and capital purposes as an IFPRU €50,000 limited licence firm and as such its capital requirement is the greater of:

(i) a base capital requirement of €50,000;

(ii) the sum of market and credit risk requirements; and

(iii) the Fixed Overhead Requirement (‘FOR’).

The Company's Pillar I capital currently comprises ordinary share capital and retained profits. The Company's Pillar 1 requirement is currently determined by its FOR as the sum of market and credit risk are considered lower in comparison.

The FOR requirement is currently £108,376 against which, at 31 December 2021, the Company held total capital resources of £4,775,642 (at 31 December 2020: £5,497,929).

The Company's capital falls into Tier 1 capital as defined by GENPRU. It does not currently have any capital falling into any other Tier categories and there are no plans to issue financial instruments falling within these Tiers in the foreseeable future. The Company is capitalised at a level well in excess of the minimum required regulatory level and the Board monitor management accounts and cash liquidity statements on a frequent basis to ensure that an adequate buffer of capital is maintained at all times.

Pillar 2 requirement

The Company undertakes an annual Internal Capital Adequacy Assessment Process (ICAAP). The ICAAP is a substantial report on the Company's business and risk environment. The ICAAP considers risk appetite, risk types, risk mitigants, together with a three-year scenario analysis and stress testing of those scenarios.

Given the nature of the Company's activities, the Company's capital requirement normally consists of the FOR, although market and credit risks are reviewed periodically in line with regulatory filing requirements. The Company applies a standardised approach to credit and market risk, but as the risk is relatively small, it is the Board’s opinion that no additional capital is required in excess of its Pillar 1 capital requirement.

The ICAAP process also considers the impact on the Company in a theoretical ‘winding down’ scenario and whether additional capital is required, above and beyond the FOR, to mitigate the risk that the Company does not have sufficient resources to wind up the business in an orderly manner. Having assessed this unlikely scenario, the Board have determined that the capital required does not exceed the Company’s FOR, whereby the financial commitments of the Company are minimal.

The Company expects to comfortably maintain its capital position in excess of its FOR, for the foreseeable future.

Remuneration Code


The FCA, through CRDIV requires firms to disclose information on their remuneration policies and pay outs on an annual basis under the Pillar 3 disclosures. The Board is of the opinion that the Company follows remuneration policies and procedures that are consistent with the requirement of the Remuneration Code (‘Code’) and which do not promote or encourage undue risk taking.

The rules of the Code are contained in the FCA's Remuneration Code located in the SYSC Sourcebook of the FCA's Handbook. The Code covers an individual's total remuneration, fixed and variable. The Company incentivises staff through a combination of the two. The Company's policy is designed to ensure that it complies with the Code and that its compensation arrangements:

  • are consistent with and promote sound and effective risk management;
  • do not encourage excessive risk taking;
  • include measures to avoid conflicts of interest; and
  • are in line with the Company's business strategy, objectives, values and long-term interests.

The Company does not have a formal remuneration committee as it is not required to establish one under the proportionality principles of the Code.


Enshrined in the European remuneration provisions is the principle of proportionality. The FCA has sought to apply proportionality in the first instance by categorising firms into 3 levels. The Company falls within FCA proportionality Level 3 and as such this disclosure is made in line with the requirements for a Level 3 Firm.

Application of the requirements

For the year ended 31 December 2021, the total gross compensation totalled £563,048 (2020: £360,000).

Both the Company directors and senior management are considered to be Code Staff as defined by the FCA. The total gross compensation paid to Code Staff during the financial year ended 31 December 2021 was as follows:

  • £364,765 paid to directors, which includes a variable discretionary element of 54.8%.
  • £198,283 paid to senior management, which includes a variable discretionary element of 42.9%.

Remuneration policy is controlled by the Board and is designed to attract, retain, and motivate the employees needed to run the business of the Company in a way which is consistent with the risk. Remuneration is considered to be in line with the market rates of pay and there is not a bonus culture which may encourage individuals to take higher risks due to strong links between pay and performance. Any bonuses awarded are considered to be prudent and do not in any way limit the Company's ability to strengthen its capital base.