Pillar 3 Disclosure 2020
Background and scope of application of directive requirements
Global Preservation Strategies Limited (“GPS” or “The Firm”) is incorporated in England and Wales and is authorised and regulated by the Financial Conduct Authority (FCA). GPS is classified as a BiPRU €50k Limited Licence firm. The Firm’s ICAAP was updated and approved by the Board on 13th July 202. GPS is an investment management and corporate finance firm and has no trading book exposures. The Firm is not a member of a group and so is not required to prepare consolidated reporting for prudential purposes.
Our Pillar 3 disclosure, as required by BIPRU 11.3.3 R, is set out below. Pillar 3 disclosures will be made at least annually as required by BIPRU 11.3.8 R and published on our web site https://gpstrategies.co.uk/ . As per BIPRU 11.3.9, The Firm considers that more frequent publication is not necessary having considered the criteria set out in BIPRU 11.4.4 R.
Disclosure: Risk Management Objectives and Policies
GPS’s highest policy-making and governing body is its Board of Directors and The Firm’s internal controls are set by policies approved at the Board level. The Board of GPS determines its business strategy and risk appetite and exercises daily management and oversight of its activities. The Board members are also responsible for establishing and maintaining The Firm’s governance arrangements along with designing and implementing a risk management framework that recognises the risks that the business faces.
The Board consists of three Company Directors and one Non-Executive Director, with Danesh Varma becoming a Non-Executive Director to introduce sufficient independent challenge into the decision-making process of the Board.
The GPS Executive Committee is headed by Vinay Gairola. The Board are further supported by The Firm’s Compliance Officer, with a view to ensuring that all issues arising from the Board meetings, risk reviews, compliance monitoring and audit observations are actioned appropriately and in a timely manner.
Vinay Kumar Gairola – Director and SMF3 *
Dilip Varma – Director *
Danesh Kumar Varma – Non-Executive Director *
Richard Leonardo Gill – Compliance Officer, SMF16 & SMF17
Sanjay Kumar Mehta – CEO of GPS Wealth
Jayanta Mitra – Company Secretary
* - Board member
The Board of directors determines how the risks our business faces may be mitigated and assess on an ongoing basis the arrangements to manage those risks.
Risk within The Firm is managed by use of the following:
- A detailed compliance monitoring programme, undertaken by our compliance function.
- Risks are considered continuously, initially discussed at regular meetings and raised at Board meetings.
- External compliance consultants raise any issues during monitoring.
The Board of directors meet on a regular basis and discuss current projections for profitability, cash flow, regulatory capital management, business planning and risk management. They manage The Firm’s risks though a framework of policy and procedures having regard to relevant laws, standards, principles and rules (including FCA principles and rules) with the aim to operate a defined and transparent risk management framework. These policies and procedures are updated as required.
The directors have identified that business, operational, market and credit risks are the main areas of risk to which The Firm is exposed. Annually the directors formally review their risks, controls and other risk mitigation arrangements and assess their effectiveness. Where the directors identify material risks they consider the financial impact of these risks as part of our business planning and capital management and conclude whether the amount of regulatory capital is adequate.
BIPRU 11.5.3 R
Disclosure: Capital resources
GPS’s total capital as at 31st December 2019 was as follows, classified under GENPRU 2 Annex 4.
|Capital & Reserves||£||Capital Resource Classification|
|Called up share capital||80,000||Core tier one capital - Permanent share capital|
|Profit and loss account||14,943||Core tier one capital - Profit and loss account|
Following completion of the latest ICAAP, the Board of GPS considers that The Firm should hold £69,633 of capital, its Pillar 1 requirement, which is one quarter of The Firm’s relevant fixed expenditure for 2019. Management confirms The Firm has adequate capital considering the size and complexity of business, with a surplus of £25,350 being held as at 31st December 2019.
Disclosure: Compliance with BIPRU 3, BIPRU 4, BIPRU 6, BIPRU 7, BIPRU 10 and the Overall Pillar 2 Rule
GPS assesses the adequacy of its internal capital to support current and future activities annually by producing the ICAAP as well as continually monitoring levels of capital against the business plan.
Credit risk is required to be assessed on all non-trading book exposures. These have been identified as follows:
|Item||Amount (£)||Exposure Class||Weight||Weighted amount (£)||8% of weighted amount|
|Amounts owed by related parties||22,976||Corporates||100%||22,976||1,838|
|Corporation tax due||0||Public sector entity||0%||0||0|
|Cash at bank||519||Institutions||20%||104||8|
The Firm has chosen to adopt the simplified (i.e. non-complex) method for calculating its exposure to credit risk under BIPRU 3.5. The Firm’s exposure to credit risk has been based on its accounts for the year ended 31st December 2018 and has been assessed as being £23,166 – 8% of risk weighted exposure amounts above.
The combined credit risk is £23,166.
This disclosure is not required as The Firm has not adopted the Internal Ratings Based (IRB) approach to Credit Risk and therefore is not affected by BIPRU 11.5.4R (3).
This disclosure is not required as The Firm has not adopted the IRB approach to Credit Risk and therefore is not affected by BIPRU 11.5.4R (3).
This disclosure is not required as The Firm does not have a Trading Book. The counterparty risk capital component has been assessed as being £0.
This disclosure is not required as The Firm has chosen to adopt the simplified (i.e. non-complex) method for calculating its exposure to credit risk under BIPRU 3.5.
This disclosure is not required as The Firm has not adopted the IRB approach to Credit and therefore is not affected by BIPRU 11.5.4R (3).
BIPRU 11.5.12 Disclosure: Market risk
Market risks are risks that arise from fluctuations in values of, or income from, assets or in interest or exchange rates. Under GENPRU 2.1.52 R a BIPRU firm must calculate its market risk capital requirement as the sum of:
(a) the interest rate PRR (including the basic interest rate PRR for equity derivatives set out in BIPRU 7.3 (Equity PRR and basic interest rate PRR for equity derivatives));
(b) the equity PRR;
(c) the commodity PRR;
(d) the foreign currency PRR;
(e) the option PRR; and
(f) the collective investment undertaking PRR.
The only point relevant to GPS has been determined to be (d), which is further elaborated on in BIPRU 7.5.
The firm had a position valued at £150,076 as at 31st December 2019 representing an investment in the shares of Radient Technologies Inc. which are listed on the TSX Venture Exchange and priced in Canadian dollars. Multiplying the sum of the absolutes of that open currency position by 8% as per BIPRU 7.5.1 (4) R results in a position risk requirement of £12,006.
This disclosure is not required as The Firm does not calculate its market risk capital requirement using a VaR model.
The firm had a position valued at £150,076 as at 31st December 2019 representing an investment in the shares of Radient Technologies Inc. which are listed on the TSX Venture Exchange and priced in Canadian dollars. The shares are valued at market price as at the balance sheet date.
Aside from cash held at the bank there is no significant exposure to interest rate fluctuations.
This disclosure is not required as The Firm does not securitise its assets.
BIPRU 11.5.18 Disclosure: Remuneration
The company is subject to and applies the requirements of the FCA Remuneration Code (SYSC 19A) as well as the FCA Prudential Sourcebook for banks, building societies and investment firms (BIPRU).
This disclosure applies specifically to the remuneration policies and approaches as applied to individuals identified as ‘Remuneration Code’ staff as defined by the Code. GPS also takes guidance from SYSC 19C - BIPRU Remuneration Code.
Taking guidance from SYSC 19C.2.2 (3) G GPS believes that due to its small size and low number of employees it is appropriate for the governing body (the Board of directors) to act as the remuneration committee. Remuneration paid is based upon a competitive market based level that compensates employees taking into account their skills, work performed and responsibilities. Overall remuneration may contain an element of variable remuneration which is entirely discretionary and based upon the performance of the company and the employee. Decisions over the level of remuneration are taken by the Board of Directors.
Code staff criteria
Those persons considered to be Code Staff are those Approved Persons performing Significant Influence Functions and any other Controlled Functions (excepting CF30s) within the Company.
For the financial year ended 31st December 2019 it is considered that under BIPRU 11.5.18 (7) Danesh Varma, Vinay Gairola, Dilip Varma, Jayanta Mitra and Richard Gill, fell within the definition of Code Staff:
Aggregate remuneration: £96,000
Remuneration expenditure was wholly fixed with no variable element.