PORTFOLIO MANAGEMENT
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Portfolio Management
Risk Management
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The Board of Directors has principal responsibility for oversight of our business ethics and risk management process. All the Directors have extensive background and experience in risk management. The Risk Management Committee constantly ensure the principles of good governance are effectively implemented in accordance with the requirements and regulations of the regulating authority. Furthermore, the committee, in collaboration with the Audit Committee, regularly review and recommend the risk management framework which include the company’s risk management processes, evaluation of major risk exposures, risk mitigation and the design of the Company’s processes and controls. The Management also reports to the Audit Committee and the Board of Directors pertaining to the enhancements made to risk management processes, as well as the setting of risk limits and controls in light of evolving financial markets, regulatory requirements and other conditions such as data privacy and internet security.
1. Risk Culture
Fostering a sound risk management culture is essential for LeadNorth to maintain its social credibility, business reputation and sustain its business activities. At LeadNorth, all employees regardless of role or geographic location, must understand their specific responsibilities related to risk management, and actively work to manage risks while maintaining highest degree of corporate governance and discipline.
2. Risk Management Policy
All executives and employees at LeadNorth, regardless of function, actively engage in risk management. LeadNorth aims to identify risks that could result in significant losses by categorising the types of risks associated with its business activities, as well as the impacts of risks and their likelihood of occurrence. In general, LeadNorth strives to minimise risks and avoids those that are difficult to identify and manage.
LeadNorth acknowledges that there are risks that cannot be identified at present. As financial professionals, all LeadNorth executives and employees are constantly expanding their risk knowledge and fostering a corporate culture that appropriately recognises, evaluates, manages, and minimises risks.
1. First Line of Defense Departments Engaged in Trading and Sales
The trading and sales personnel shall detect, evaluate, and manage risks that arise during everyday operations in compliance with the Risk Tolerance Questionnaire scores, company rules, and standard operating procedures.
2. Second Line of Defense Departments Engaged in Risk Management
The Risk Management Team is in charge of developing the risk management framework and assisting the first line officers. They shall independently monitor the risks and report to senior management. The Risk Management team manage and monitor the risk-taking actions of the first line as needed.
3. Third Line of Defense Internal Audit Department
The Internal Audit Department shall evaluate and govern the operations of sales team and risk management team. It shall make appropriate recommendations for improvement.
Portfolio Management and Investments are subjected to risks such as market risk, credit risk, operational risk, and liquidity risk. One of management's key tasks is to properly handle these risks and implement appropriate mitigation measures.
In order to safeguard the interest our clients while comply with the relevant laws and regulations, it is necessary for us to maintain our own capital adequately while apply effective investment strategies in any kind of economic situation.
As indicated in the Risk Policy, LeadNorth determined the types and levels of risk (risk-appetite) the company will assume. The Executive Board approves the Risk Policy and monitors risks against a risk appetite daily.
If risk levels by chance surpass the risk appetite stipulated, the top management will consult directly with staff and take steps to eliminate excessive risk as necessary.
Based on the PDCA cycle (Plan, Do, Check, and Act), all LeadNorth executives and staff execute risk management activities as three defense lines or committees to guarantee that the numerous risks inherent in everyday operations do not exceed the level of risk appetite.
Plan
In line with LeadNorth's corporate philosophy, the Executive Management Board develops business strategies and determines appropriate risk appetite while taking the business environment and management resources into consideration. These are examined on a yearly basis or as needed.
Do
Each business division executes its business strategies in accordance with its risk tolerance and the Code of Conduct.
Check
The first line of defense finds, evaluates, and manages risks that may exceed the risk appetite, whereas the second line of defense advises, supports, and checks the first line of defense via monitoring, analysis, stress testing, and predictive management. The third line of defense investigates and advises on these from an unbiased standpoint.
Action
Each business division strives to reduce risks that may exceed the risk appetite, as well as to carry out operations based on guidance, assistance, and monitoring from the second line of defense.
Investment Advisory
Portfolio Management
Risk Management
For Investors
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