The original Basel Accord was agreed in 1988 by the Basel Committee on Banking Supervision. This accord, now referred to as Basel I, helped to strengthen the stability of the international financial system as a result of the higher capital ratios that it required.

The Basel II accord is a revision of the existing framework, which aims to make the framework more risk sensitive and representative of the current day risk management practices.

The accord was implemented in the European Union through the Capital Requirements Directive (“CRD”) and Capital Requirements Regulation (“CRR”). The CRD and CRR details the standard regulatory capital framework for the financial services industry within the EU and consists of three pillars:

  • Pillar 1 specifies the minimum capital requirements of firms to cover credit, market and operational risk;
  • Pillar 2 requires firms to assess the need to hold additional capital to cover risks not covered under Pillar 1; and
  • Pillar 3 requires a set of disclosures to be made which enable market participants to assess information on firms’ capital, risk exposures and risk management procedures.

Minimum Pillar 3 disclosure requirements are set out in Articles 431-451 of the CRR.

The disclosure requirements in Articles 431-451 of the CRR aim to complement the minimum capital requirements (Pillar 1) and the supervisory review process (Pillar 2) and aim to encourage market discipline by allowing market participants to assess the impact of key information on risk exposures and the risk assessment processes of the firm.

The following represents the Punter Southall Wealth Limited (“the Company”) Pillar 3 disclosures in accordance with this requirement.