IMC Annual Report 2018 - Page 35



9. RISK & COMPLIANCE
IMC’s risk and compliance infrastructure exists to protect, support
and facilitate the firm’s strategy. Whether embedding new regulatory
requirements or onboarding direct counterparties, 2018 was a busy year.
Risk is not a static environment.
onboarding process. As Mark,
of maturity, and monitoring and
As business evolves, strategies
Head of Risk and Compliance
reporting further refined and
change. At the same time external
in Europe, explains: “In 2018
improved. Besides monthly
factors change too, notably
we further strengthened
vulnerability assessments
regulation. To reflect those shifts,
our approval process for
conducted by IMC, an external
IMC continues to invest in people
counterparties. We conduct a
company performs an annual
and state-of-the-art technology
more extensive due diligence
test aimed at finding and
to expand and enhance its risk
in terms of creditworthiness,
exploiting vulnerabilities in
management framework.
money laundering and terrorism
our global network security.
financing to ensure we only do
The ongoing development
business with solid institutions.
IMC supports strong, smart
of our trading strategies,
At the same time, IMC itself is
regulation and well-regulated
including expanding the part
experiencing more extensive
markets. We believe in a level
of the business related to
due diligence requests made
playing field and equal market
trading relationships with direct
by our direct counterparties or
access. We actively and firmly
counterparties, introduced new
other relationships like brokers,
support initiatives that share our
types of risk. This required the
clearing firms and exchanges.”
conviction. We are a founding
member of FIA European
development of several new risk
metrics, limits, processes and
Another major focus was
Principal Traders Association,
monitoring tools.
Information Security. Controls
and a member of FIA Principal
put in place in prior years
Traders Group and Association
were taken to a higher level
of Proprietary Traders.
Growth of the direct counterparty
business necessitated a rigorous
IMC’S MAIN REGULATORS
MiFID II took effect in January,
500 people with their cultures, their
of defence model, with risk and
aiding market transparency, while
own management teams, and even
compliance teams reporting
regulations related to capital and
their own buildings. The separation
directly to the Chief Risk Officer
investment firm regimes – the
of the risk/compliance function and
and indirectly to the local
capital requirements directive
the front offices has been pushed
Managing Director in each
(CRD4), and the European Union
way too far in my opinion. IMC
office. This governance model
Investment Firm Regulation (IFR)
cannot afford to create so much
works because the split in risk
and Investment Firm Directive (IFD)
distance. We are very much aware
‘ownership’ and risk ‘oversight’
– demanded dedicated focus. The
we need dealing room presence
is truly accepted throughout
uncertainty over Brexit also brings
to gain deep understanding of our
the firm. Here a trader will never
challenges for IMC, and the firm
trading strategies, the technology
say after the fact, ‘yeah, but
has an active working group in
we use and the markets we trade.
‘risk’ should have monitored
place to ensure we are prepared
Having respected and credible
it, so I’m not to blame’. That’s
for any of the possible outcomes.
‘eyes and ears’ in the dealing room
not our culture. Everyone takes
is the most critical condition for
responsibility. It’s one of the
high quality risk oversight.
biggest assets we have.”
IMC’s group-wide integrated
34
UNITED STATES
HONG KONG
NETHERLANDS
AUSTRALIA
CHINA
SEC, CFTC,
FINRA, NYSE
SFC
DNB & AFM
ASIC
CSRC
approach to risk management is its
major strength. Mark: “At many big
“At the same time, we recognise
insurers and banks, the risk and
the critical importance of
compliance teams have become
‘independency’ in risk oversight.
separated silos; sometimes 100 or
So, IMC operates a three lines
IMC Annual Report 2018
35

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