Grupos de Trabajo # 7 - Informe Working Group # 7 – Report General Business and Operational Risks

Working Group # 7 Principle / Principio # 15 General Business risk 1.What constitutes "compliance" with the Principle? Describe (in specific terms) the state characteristics of a CSD that fully meets the requirements of the Principle. 1. Qué constituye el cumplimiento con el Principio? Describe (en términos específicos) el estado /características de un DCV que responda plenamente los requerimientos del Principio. "Comprehensive" risk policy and Framework Effective control systems that mitigate against realization of risks Insurance Review and revision of use of funds/budgets/forecasts Recourse to Shareholders Cost cutting exercises Board awareness - capitalization policy / Sufficient capital to support/ dividend policies

2. In relation to the Key Considerations for the Principle, what metrics/data should a CSD compile in order to demonstrate compliance? How might this data be sourced? 2. En relación a las Consideraciones Claves para el Principio, ¿qué métricas datos un DCV debe recopilar para demostrar el cumplimiento? ¿Cómo podría obtenerse esta información (fuentes)? Budget reviews - timely and regular Key indicators need to be:- CSD specific Offer independence - what you can't measure you can't manage Board has applied their minds Economic indicators - International Sharing of Risk factors Working Group # 7 Principle / Principio # 15 General Business risk

3. What result levels" with respect to these metrics/data should a CSD achieve in obtaining "compliance"? Why? 3. ¿Qué niveles de resultado con respecto a estos indicadores / datos debe lograr un DCV para obtener el cumplimiento? ¿Por qué? Ability for ACSDA members to share but understand why these numbers may be different Benchmarking Know what we want to measure… Balanced Scorecards / Lead Indicators Working Group # 7 Principle / Principio # 15 General Business risk

4. What, if any, provisions should you (as an FMI) be making to ensure continued adherence to the principle (s), for example in times of market or operational distress? 4. ¿Qué provisiones, si existe alguna, debe usted (como una FMI) tener para asegurarse de continuar adherido a los principios? por ejemplo en tiempos de emergencia o funcionamiento del mercado. In times of war… plans are the first casualty of battle Contingency planning Testing Good governance principles and policies Working Group # 7 Principle / Principio # 15 General Business risk

1.What constitutes "compliance" with the Principle? Describe (in specific terms) the state characteristics of a CSD that fully meets the requirements of the Principle. 1. Qué constituye el cumplimiento con el Principio? Describe (en términos específicos) el estado /características de un DCV que responda plenamente los requerimientos del Principio. Sound Investment policy Quality of investment Liquidity profile Segregation of assets Working Group # 7 Principle / Principio # 16 Custody and Investment Risk

2. In relation to the Key Considerations for the Principle, what metrics/data should a CSD compile in order to demonstrate compliance? How might this data be sourced? 2. En relación a las Consideraciones Claves para el Principio, ¿qué métricas datos un DCV debe recopilar para demostrar el cumplimiento? ¿Cómo podría obtenerse esta información (fuentes)? Control standards for Participants - verified by External Auditors Know what we want to measure… Balanced Scorecards / Lead Indicators Working Group # 7 Principle / Principio # 16 Custody and Investment Risk

3. What result levels" with respect to these metrics/data should a CSD achieve in obtaining "compliance"? Why? 3. ¿Qué niveles de resultado con respecto a estos indicadores / datos debe lograr un DCV para obtener el cumplimiento? ¿Por qué? No standard but organization-specific - ideally need to start building up data in order to be able to map trends going forward Working Group # 7 Principle / Principio # 16 Custody and Investment Risk

4. What, if any, provisions should you (as an FMI) be making to ensure continued adherence to the principle (s), for example in times of market or operational distress? 4. ¿Qué provisiones, si existe alguna, debe usted (como una FMI) tener para asegurarse de continuar adherido a los principios? por ejemplo en tiempos de emergencia o funcionamiento del mercado. In times of war… plans are the first casualty of battle Contingency planning Testing Good governance principles and policies Working Group # 7 Principle / Principio # 16 Custody and Investment Risk

1.What constitutes "compliance" with the Principle? Describe (in specific terms) the state characteristics of a CSD that fully meets the requirements of the Principle. 1. Qué constituye el cumplimiento con el Principio? Describe (en términos específicos) el estado /características de un DCV que responda plenamente los requerimientos del Principio. In addition to many of the issues listed under 15 we also need to include:- Appropriate operational resilience - Robust, effective Business Continuity Planning Comprehensive assessment of interdependencies - up and down! Working Group # 7 Principle / Principio # 17 Operational Risk

2. In relation to the Key Considerations for the Principle, what metrics/data should a CSD compile in order to demonstrate compliance? How might this data be sourced? 2. En relación a las Consideraciones Claves para el Principio, ¿qué métricas datos un DCV debe recopilar para demostrar el cumplimiento? ¿Cómo podría obtenerse esta información (fuentes)? Control standards for Participants - verified by External Auditors Know what we want to measure… Balanced Scorecards Lead Indicators Working Group # 7 Principle / Principio # 17 Operational Risk

3. What result levels" with respect to these metrics/data should a CSD achieve in obtaining "compliance"? Why? 3. ¿Qué niveles de resultado con respecto a estos indicadores / datos debe lograr un DCV para obtener el cumplimiento? ¿Por qué? No standard but organization-specific - ideally need to start building up data in order to be able to map trends going forward Working Group # 7 Principle / Principio # 17 Operational Risk

4. What, if any, provisions should you (as an FMI) be making to ensure continued adherence to the principle (s), for example in times of market or operational distress? 4. ¿Qué provisiones, si existe alguna, debe usted (como una FMI) tener para asegurarse de continuar adherido a los principios? por ejemplo en tiempos de emergencia o funcionamiento del mercado. In times of war… plans are the first casualty of battle Contingency planning Testing Good governance principles and policies Working Group # 7 Principle / Principio # 17 Operational Risk