Risk Management

ADM Investor Services Europe has policies and procedures in place to manage and control its risks.

The risks applicable to ADM Investor Services Europe are identified and recorded in a risk matrix. These risks may change over time as a result of internal or external developments. The assessment of actual and potential risks is therefore reviewed and reassessed on a regular basis and at least annually.

In addition, ADM Investor Services Europe maintains capital in order to ensure that sufficient buffers are available to adequately absorb the impact of specific risks should they materialise, without jeopardising the continuity of the business or causing harm to its clients. This capital is primarily held in bank accounts with a systemically important Dutch bank, which limits the liquidity risks of ADM Investor Services Europe. The capital and liquidity position is actively monitored by an external controller.

In the opinion of the management of ADM Investor Services Europe, the firm’s risk profile is aligned with its business strategy and adequate measures have been implemented to effectively manage the risks applicable to the firm.

Capital Adequacy

Given the licence held by ADM Investor Services Europe as referred to in section 2:65 of the Dutch Financial Supervision Act (Wet op het financieel toezicht), ADM Investor Services Europe is required to comply with the statutory capital requirements set out in the Financial Supervision Act and in EU Regulation 2019/2033 on the prudential requirements for investment firms. These capital requirements consist of minimum own funds requirements on the one hand and solvency requirements on the other.

Minimum Own Funds Requirement

ADM Investor Services Europe is required to comply on a continuous basis with the highest of the applicable statutory minimum own funds requirements, which is legally set at EUR 150,000.

Solvency Requirements

In addition to the obligation to maintain a minimum level of own funds at all times, ADM Investor Services Europe must comply with statutory solvency requirements. These consist of a fixed overheads requirement and a risk‑based requirement based on so‑called K‑factors.

The fixed overheads requirement stipulates that the minimum amount of regulatory capital of ADM Investor Services Europe must amount to at least 25 percent of the fixed overheads incurred in the preceding financial year.

Monitoring

Compliance with the minimum own funds requirement and the solvency requirements is monitored on an ongoing basis by the controller of ADM Investor Services Europe. In particular, a detailed calculation demonstrating compliance with the applicable requirements is prepared at least on a quarterly basis.

If the continuous monitoring or the detailed calculations indicate that ADM Investor Services Europe does not, or may within the foreseeable future no longer, comply with the applicable requirements, the management of ADM Investor Services Europe is informed immediately. The management will then determine which measures are necessary to ensure renewed and sustained compliance and will make every effort to implement such measures. In addition, De Nederlandsche Bank will be informed.