CFM INDOSUEZ Wealth Management - 2020 Annual Report

35 investment services and subject to ACPR supervision. The system includes a process for controlling transactions and internal procedures, a structure for accounting and processing information, systems for measuring risks and results, risk monitoring and management systems, an informat ion and documentation system and a process for monitoring flows of cash and securities. For CFM Indosuez Wealth Management and its subsidiaries, CFM Indosuez Gestion and CFMConseil en Investissement, the risk management function is organised locally within the Risk and Permanent Control department, which is responsible for the oversight, coordination and supervision of the risk and permanent control system (credit risk, market risk and operational risk). To round out this system, internal control is also performed through periodic controls carried out under the responsibility of the General Inspection department and compliance controls covering in particular onboarding and KYC reviews, financial security, transaction monitoring and approval, compliance and fraud risk monitoring. The CA CIB Chief Risk Officer (who reports to the ACPR) and the Indosuez Wealth Management Risk & Permanent Control (RPC) department delegate their authority to the Head of the Risk and Permanent Control department to oversee the risk control and supervision system, based on: · A central system including level 2.1 and 2.2. Controls, which are applied by all Group entities, implemented by IndosuezWealthManagement via itsmain control functions (Legal, Compliance, Finance, Security, Permanent Control, etc.). · A local system of controls implemented by all operating departments (level 1 and 2.1) and level 2.1 and 2.2 controls performed by the control functions, to complete the scope of the Wealth Management Business Line Common Control Plan. Most of the results of the controls are centralised and monitored via the IT solution Copilot, which is used by all Group entities. Results classified red or orange, meaning that improvements are needed, are subject toa specific analysis andanassessment byPermanent Control, and are reported to the Internal Control Committee and the Audit and Risk Committee. An action plan is implemented if necessary. The results of all four quarters of 2020 are satisfactory and do not present amajor degradation in risk despite the Covid- 19 pandemic, the business continuity plans deployed and themassive recourse to remoteworking inMarch and October 2020. - INFORMATION PROVIDED TO EXECUTIVE DIRECTORS, THE INTERNAL CONTROL COMMITTEE AND THE BOARD OF DIRECTORS AND DECISIONS MADE IN 2020: Information provided to senior management includes details of outsourced activities, the approval and monitoring of credit risk limits, the results of controls across the entire internal control scheme, significant incidents, anomalies detected by the anti-money laundering and counter-terrorist financing monitoring and analysis system, and any other significant events relating to permanent risk control, compliance and periodic control, covering both internal and external activities. The governing body is also provided with details of changes in outstanding loans, ratings and non- performing loans. As well as the reports made by the Risk and Permanent Control department, the Compliance and Ethics function also submits reports to the executive bodies. The Internal Control Committee met on 12 February, 10 June and 15 October 2020. Reports on internal control, risk measurement and monitoring and the monitoring of cheques for 2020 were submitted to CFM Indosuez Wealth Management’s Board of Directors on 12 March 2021. The half-yearly Internal Control Report was presented to the CFM Indosuez Wealth Management Board of Directors on 15 October 2020 and the 2020 Internal Control Report and its notes were presented and approved by management at the Internal Control Committeeon9March2021 and theBoardof Directors’ meeting on 12 March 2021.