Financial Services Rule Book 2016 Policy Maintenance Obligations

January 2017 Page 1 of 4 Financial Services Rule Book 2016 – Rules relating to policies Summary only – this document is not intended to be used without reference to the Financial Services Rule Book, nor can the Isle of Man Financial Services Authority accept responsibility for its accuracy. It remains the user’s responsibility to review the source legislation and ensure compliance with the Rule Book requirements. This table sets out the obligations in the Financial Services Rule Book 2016 for licenceholders under the Financial Services Act 2008 to maintain policies. Rule Title Rule Responsibility Applies To Comment Vulnerable clients 6.31 A licenceholder Class 2 Establish and implement. Valuation of investments 6.55 A licenceholder Class 3 (except activities in subclasses 11 or 12) Changes to valuation methods must be agreed by the governing body. Management controls 8.3 Responsible officers Classes 1 - 8 Establish and maintain. Risk management 8.6 Responsible officers Classes 1 – 8 (except Class 8(1), 8(2)(b), or 8(3)) Annual review required. See also 8.33 for Class 1 licenceholders. Remuneration policy 8.7 A licenceholder Class 1, Class 2 and Class 3(6),(7) or (8) Establish, implement and maintain. Whistleblowing policy 8.8 A licenceholder All Classes Establish, implement and maintain. Conflicts of interest 8.9 A licenceholder All Classes except Class 8(1), 8(2)(b), or 8(3) Establish, implement and maintain.

Isle of Man Financial Services Authority Summary only. It is each licenceholder’s responsibility to review the rules and ensure that it is in compliance with the Rule Book. January 2017 Page 2 of 4 Rule Title Rule Responsibility Applies To Comment Credit risk policy 8.36 A licenceholder by its directors Class 1 incorporated in IOM Annual review required under 8.36 and notification to the Authority, within 4 months after the end of its financial year, that during the financial year the directors reviewed and approved the policy and were satisfied that it was up to date and appropriate under 8.47.1 Large exposures policy 8.38 A licenceholder by its directors Class 1 incorporated in IOM Annual review required under 8.38 and notification to the Authority, within 4 months after the end of its financial year, that during the financial year the directors reviewed and approved the policy and were satisfied that it was up to date and appropriate under 8.47. Arrears and provisions policy for bad and doubtful debts 8.42 A licenceholder by its directors Class 1 incorporated in IOM Annual review required under 8.42 and notification to the Authority, within 4 months after the end of its financial year, that during the financial year the directors reviewed and approved the policy and were satisfied that it was up to date and appropriate under 8.47.

1 The Authority’s Consent and Notification Summary Table provides further information regarding the various types of events which licenceholders are required to inform the Authority of, either on a notification basis, or prior consent before an action can proceed basis.

Isle of Man Financial Services Authority Summary only. It is each licenceholder’s responsibility to review the rules and ensure that it is in compliance with the Rule Book. January 2017 Page 3 of 4 Rule Title Rule Responsibility Applies To Comment Liquidity policy 8.43 A licenceholder by its directors Class 1 incorporated in IOM Annual review required under 8.43 and notification to the Authority, within 4 months after the end of its financial year, that during the financial year the directors reviewed and approved the policy and were satisfied that it was up to date and appropriate under 8.47. Foreign exchange risk 8.45 A licenceholder Class 1 incorporated in IOM Annual (or more frequent) review required under 8.45 and notification to the Authority, within 4 months after the end of its financial year, that during the financial year the directors reviewed and approved the policy and were satisfied that it was up to date and appropriate under 8.47. Interest rate risk 8.46 A licenceholder Class 1 incorporated in IOM Annual (or more frequent) review required under 8.46 and notification to the Authority, within 4 months after the end of its financial year, that during the financial year the directors reviewed and approved the policy and were satisfied that it was up to date and appropriate under 8.47.

Isle of Man Financial Services Authority Summary only. It is each licenceholder’s responsibility to review the rules and ensure that it is in compliance with the Rule Book. January 2017 Page 4 of 4 Rule Title Rule Responsibility Applies To Comment Annual review of certain policies 8.47 A licenceholder Class 1 incorporated in IOM Notification to the Authority, within 4 months after the end of its financial year, that during the financial year the directors reviewed and approved each policy and were satisfied that they were up to date and appropriate. Credit risk policy 8.49 A licenceholder Class 1 incorporated outside IOM Annual review required. Large Exposures 8.51 A licenceholder Class 1 incorporated outside IOM Must have and comply with documented controls and procedures in accordance with the large exposures policy of its head office or parent company. Arrears and provisions policy for bad and doubtful debts 8.52 A licenceholder Class 1 incorporated outside IOM Annual review required. Liquidity policy 8.53 A licenceholder Class 1 incorporated outside IOM Annual (or more frequent) review required. Foreign exchange risk 8.55 A licenceholder Class 1 incorporated outside IOM Annual (or more frequent) review required. Interest rate risk 8.56 A licenceholder Class 1 incorporated outside IOM Annual (or more frequent) review required. Conflicts of Interest 9.21 Professional Officer Professional Officer Establish, implement and maintain.