Risks & uncertainties
Loss of customer assets or data risk
Fraud, cyber and physical security
Risk | The risk that customer assets or data are misappropriated as a consequence of a fraud perpetrated by our own employees or a third party. Globally there is a continued growing risk from cyber attacks, in terms of their sophistication and potential impact. |
---|---|
Examples of mitigating actions |
|
Counterpart failure
Risk | The risk that customers assets are lost as a result of the failure of a counterparty holding those assets. |
---|---|
Examples of mitigating actions |
|
Regulatory risk
Breach of regulatory requirements
Risk | The Share Centre is a regulated entity. There is the risk that the Group fails to comply with current (and new) FCA rules e.g. treatment of customers and the handling of customer assets or standards expected e.g. Conduct Risk. This could lead to regulatory sanction, legal action or substantial fines. |
---|---|
Examples of mitigating actions |
|
Regulatory capital
Risk | The risk that the regulated capital required by the FCA to be held by the Group and its regulated entities is insufficient. |
---|---|
Examples of mitigating actions |
|
Financial crime
Risk | The risk that The Share Centre is used to facilitate money laundering, fraud or corruption. |
---|---|
Examples of mitigating actions |
|
Operational failure risk
IT hardware and software failure
Risk | The operations of the Group are highly dependent upon IT. There is the risk that the Group cannot operate for a period due to a failure in its core systems or interfaces, which could impact the Group’s financial performance and regulatory requirements. |
---|---|
Examples of mitigating actions |
|
Reconciliation failure
Risk | The risk of loss of CASS arising from a failure to complete in a timely and/or accurate manner the necessary reconciliations. Also the risk of fines for inadequate systems and controls |
---|---|
Examples of mitigating actions |
|
Key person dependency
Risk | The risk that the Group has excess corporate knowledge vested in a small number of key individuals. The loss of that knowledge may impact our ability to serve our customers effectively. |
---|---|
Examples of mitigating actions |
|
Process or control failures
Risk | The risk that a control fails or human error, that results in financial loss or regulatory harm. |
---|---|
Examples of mitigating actions |
|
Process or control failures
Risk | The risk of a material misstatement or omission within the Group’s financial or regulatory reporting. In preparing the financial statements in accordance with International Financial Reporting Standards, the Directors are required to make accounting judgements such as the valuation of unlisted investments and the capitalisation of intangible assets. These assumptions could be significant to the financial statements. Together with the risk of management override, there is a risk that the estimate or assumption used could be inaccurate or that the assumptions used subsequently turn out to be incorrect. |
---|---|
Examples of mitigating actions |
|
Business model failure risk
Competition, investor appetite and sustainability of business model
Risk | In what is a competitive market, the risk that customers are lost to existing (or new) competitors. This may require the Business to invest or spend more, which could impact the Group’s financial performance. Most revenues are driven by personal investors, with the risk that the Group’s financial performance is impacted by investor confidence in the stock market or economic sentiment. |
---|---|
Examples of mitigating actions |
|
Failure to execute group strategy
Risk | The risk that poor management or investment decisions could result in distraction or financial loss. |
---|---|
Examples of mitigating actions |
|
Cultural failure
Risk | A failure of the culture of the Group, particularly with regard to the way it treats its customers and employees, could lead to a loss of customers and/ or regulatory censure. |
---|---|
Examples of mitigating actions |
|
Loss of third party or relationships
Risk | The risk of financial loss or reputational harm of losing a major relationship. |
---|---|
Examples of mitigating actions |
|