Pillar III Disclosure
The Sanlam Private Wealth Group (SPW) consists of Sanlam Private Investments (UK) Ltd, Sanlam Securities UK Ltd and Sanlam Private Investments Wealth Management (UK) Ltd. They are regulated by the Financial Conduct Authority (FCA) and are all subsidiaries of Sanlam Private Investments (UK) Holdings Ltd. The Sanlam Private Wealth Group is part of the Sanlam Limited Group for regulatory capital purposes, though all three regulated subsidiaries are required to meet its own regulatory capital requirements.
Sanlam Private Investments (UK) Ltd (SPI (UK)) is classified as a IFPRU 125k limited licence firm and its Pillar 1 capital resources requirement is set at the higher of €125k, its Fixed Overheads Requirement of £3,576k, or the sum of its Credit Risk and Market Risk requirements of £1,128k. SPI (UK) held Tier 1 capital totalling £13,113k as at 31 December 2015 and after deducting illiquid assets, this exceeded the Pillar 1 requirement by £7,364k.
Sanlam Securities UK Ltd (SSUK) is also classified as a IFPRU 125k limited licence firm and its Pillar 1 capital resources requirement is set at the higher of €125k, its Fixed Overheads Requirement of £1,205k, or the sum of its Credit Risk and Market Risk requirements of £279k. SSUK held Tier 1 capital totalling £2,587k as at 31 December 2015 and after deducting illiquid assets, this exceeded the Pillar 1 requirement by £1,382k.
Sanlam Private Investments Wealth Management (UK) Ltd (SPIWM) is classified as a Non-MIFID Personal Investment firm and is a B3 Low Resource under IPRU(INV). As at 31 December 2015 the Company had a total own funds requirement of £39k. The Company held £1,993k of own funds, exceeding the requirement by £1,954k.
SPW has carried out its own assessment of the amount of capital required to cover its business needs and risks, as required to determine its Pillar 2 capital resources requirement. Based on this assessment the Group has sufficient capital to meet its Pillar 1 and 2 capital resources requirements.
SPW has established a risk management framework. This assesses each risk for the likelihood of its occurrence and its impact, after allowing for the controls in place. SPW continually monitors its current and future capital requirements through this risk management framework.
The principal risk to the ongoing success of SPW is a major and sustained downturn in stock market levels, which would adversely impact revenue streams. The directors believe that current economic conditions in the UK are conducive to positive investment returns, but in the event of a sharp stock market fall this would present a number of opportunities for a well-run and profitable business and that SPW to continue to win significant levels of new business whilst retaining tight control of expenditure.
The other significant risks faced by the business are:-
SPW has an excellent reputation as a provider of high quality investment management services. There is a risk that significant damage to reputation could arise from poor client service or regulatory censure and lead to the loss of existing clients as well as impacting on the ability to gain new clients. This risk is minimised through the maintenance of a culture of high ethical and professional standards. SPW’s compliance department ensures conformity with the relevant regulations and statutes in its Regulatory risk. Dealings with clients and SPW’s processes and controls are also reviewed by the Sanlam Group internal audit function.
SPW’s business is highly regulated and a breach of regulations could lead to a fine or disciplinary action against SPW or its staff. SPW monitors actual and impending changes in regulation in order to assess the impact on its business and plans to ensure any changes are implemented in a timely manner. SPW’s regulated subsidiaries are subject to reviews by the regulator from time to time.
SPW operates in a competitive environment and faces the risk of client loss from a failure to respond to market changes. SPW seeks to minimise this risk through its investment in its staff. SPW regularly reviews and benchmarks its remuneration packages in order to retain and recruit high quality staff.
Country by Country Reporting
Article 89 of the Capital Requirements Directive IV (CRD IV) requires credit institutions and investment firms in the EU to disclose specific items of information, annually, specifying, by Member State and by third country in which they have an establishment.
This information is presented on a consolidated basis for SPW and its subsidiaries for the year ended 31 December 2015 as follows:-
||Sanlam Private Wealth Group (SPW)
|Nature of activities
||Investment Management and Stockbroking
||United Kingdom (Ultimate parent company is located in South Africa)
||£26.2m (continuing operations only)
|No of employees
||153 Full-time and 16 Part-time
|Profit before tax
||£1.04m (after exceptional items)
|Public subsidies rec’d