IFPR Disclosures
The below information relates to Tibra’s UK regulated entity, Tibra Trading Europe Limited (“TTEL”) and is required under the Investment Firms Prudential Regime (“IFPR”).
Risk
TTEL exists within the Tibra group corporate structure to facilitate strategies that require a UK MiFID investment firm permission, primarily for any strategy with direct access to a UK regulated investment exchange, and any strategy that uses post-Brexit transitional provisions to access Continental European exchanges.
As TTEL is only authorised to deal in investments as principal, it provides no services to consumers or other clients and only trades on regulated derivative markets, where it is intermediated by a general clearing member firm. As at 30 June 2023, TTEL only undertook extremely limited trading activity in a single continental European derivatives market.
In light of the above, TTEL’s ability to cause harm to markets and consumers is extremely limited, but an array of controls are in place to prevent such adverse scenario, including post trade analysis, concentration constraints and capital/liquidity monitoring.
While TTEL’s business model and interaction with the market participants are not deemed complex, TTEL’s Risk Management function runs an Enterprise Risk Management (ERM) framework, and its related processes, to holistically identify all forms of risks attached to the activity of the Tibra group.
Each strategy must fit within the Tibra group’s overall risk appetite set by the Board and is moved to production after fulfilling the risk management process comprising of the sign off by control function holders, the approval of all risk limits and parameters, the monitoring and resolution of all unexpected events.
The ERM supports the on-going identification, definition, categorisation and quantification of all risks, existing or emerging, faced by the business, regularly including new risks, as well as the risk TTEL could represent to the other market participants. The process involves the cross sectional input of several functions, via experienced individuals. All risks assessed by the ERM, via their quantification, are measured against the group’s Risk Appetite Statement to define any necessary corrective actions.
Considering the above process currently in place for TTEL and the previous feedback from the FCA on it, the directors of TTEL deemed the process appropriate to respond to the ICARA assessment requirements. The directors do not believe that there is a material risk of misalignment between the group’s business model and operating model and the interests of the wider financial markets. Additionally, the directors of TTEL do not feel that it poses a significant risk of material harm to markets or consumers, by not providing services to clients and having its market access intermediated by its general clearing firm.
Corporate Governance
The management body of TTEL comprises its board of directors and relevant heads of department. TTEL has put in place systems and procedures to ensure that strategic objectives, risk strategy and internal governance are overseen and approved by these people. Relevant decisions are documented and escalated for board and department approval in line with the Tibra Group’s policies, including those on delegation and risk appetite. The board of directors of TTEL remains ultimately responsible for approving TTEL’s accounting records, and its compliance with the regulatory system. TTEL holds quarterly board meetings to keep abreast of strategic developments, and meets ad-hoc as necessary to deal with strategic matters that arise outside of this timetable.
TTEL also benefits from the Tibra Group’s corporate governance systems and controls. These include systems that specifically address those matters set out in SYSC 4.3A.1R.
There are no relevant directorships held by the members of the management body, neither has the FCA granted any modification of waivers
The Tibra Group is committed to encouraging equality, diversity and inclusion among our workforce, and eliminating unlawful discrimination. A wide range of backgrounds, personal preferences, and unique characteristics amongst our staff all add to the strength of the company as a whole. Performance is the only thing that matters, and we embrace the diversity of our staff.
We:
- Embrace equality, diversity and inclusion in the workplace, and at all levels of the organisation.
- Strive to create a working environment free of bullying, harassment, victimisation and unlawful discrimination, promoting dignity and respect for all, and where individual differences and the contributions of all staff are recognised and valued.
- Take seriously complaints of bullying, harassment, victimisation and unlawful discrimination by fellow employees, suppliers, and any others in the course of Tibra’s activities. Such acts will be dealt with as misconduct under the organisation’s Policy.
- Make all decisions concerning staff based on merit.
- Review employment policies and procedures when necessary to ensure fairness, and to take account of changes in the law.
TTEL has a dedicated Risk team but does not have a board Risk Committee.
Own Funds
In assessing TTEL’s compliance with the overall financial adequacy rule, the directors have considered whether there is a need to hold additional own funds or additional liquid assets above the firm’s own funds requirement and basic liquid assets requirement. These base level requirements are complied with at all times and monitored daily, including through automated reporting.
The disclosures required by MIFIDPRU 8.5.1 are as follows, each as at 30 June 2022:
MIFIDPRU 8.5.1.1.a – Nil
MIFIDPRU 8.5.1.1.b – GBP 9,299
MIFIDPRU 8.5.1.1.c – GBP 1,115,438
MIFIDPRU 8.5.1.2 – GBP 1,580,504
MIFIDPRU 8.4.1:
| Composition of regulatory own funds | |||
| Item | Amount (GBP thousands) | Source based on reference numbers/letters of the balance sheet in the audited financial statements | |
| 1 | OWN FUNDS | ||
| 2 | TIER 1 CAPITAL | ||
| 3 | COMMON EQUITY TIER 1 CAPITAL | ||
| 4 | Fully paid up capital instruments | 3,131 |
Page 14, Note 14 NB: the financial statements are in AUD |
| 5 | Share premium | ||
| 6 | Retained earnings | -3,131 |
Page 14, Note 14 NB: the financial statements are in AUD |
| 7 | Accumulated other comprehensive income | ||
| 8 | Other reserves | ||
| 9 | Adjustments to CET1 due to prudential filters | ||
| 10 | Other funds | ||
| 11 | (-)TOTAL DEDUCTIONS FROM COMMON EQUITY TIER 1 | ||
| 19 | CET1: Other capital elements, deductions and adjustments | ||
| 20 | ADDITIONAL TIER 1 CAPITAL | N/A | |
| 21 | Fully paid up, directly issued capital instruments | ||
| 22 | Share premium | ||
| 23 | (-) TOTAL DEDUCTIONS FROM ADDITIONAL TIER 1 | ||
| 24 | Additional Tier 1: Other capital elements, deductions and adjustments | ||
| 25 | TIER 2 CAPITAL | N/A | |
| 26 | Fully paid up, directly issued capital instruments | ||
| 27 | Share premium | ||
| 28 | (-) TOTAL DEDUCTIONS FROM TIER 2 | ||
| 29 | Tier 2: Other capital elements, deductions and adjustments | ||
| Own funds: reconciliation of regulatory own funds to balance sheet in the audited financial statements | ||||
|
Flexible template – rows to be reported in line with the balance sheet included in the audited financial statements of the investment firm. Columns should be kept fixed, unless the investment firm has the same accounting and regulatory scope of consolidation, in which case the volumes should be entered in column (a) only. Figures should be given in GBP thousands unless noted otherwise. |
||||
| a | b | c | ||
| Balance sheet as in published/audited financial statements | Under regulatory scope of consolidation | Crossreference to template OF1 | ||
| As at period end | As at period end | |||
| Assets – Breakdown by asset classes according to the balance sheet in the audited financial statements | ||||
| 1 | Current assets | 35,486 | ||
| 2 | Non-current assets | 2 | ||
| xxx | Total Assets | 37,074 | ||
| Liabilities – Breakdown by liability classes according to the balance sheet in the audited financial statements | ||||
| 1 | Current liabilities | 7,858 | ||
| 2 | Non-current liabilities | 205 | ||
| xxx | Total Liabilities | 8,064 | ||
| Shareholders’ Equity | ||||
| 1 | Issued capital | 32,141 | ||
| 2 | Retained earnings | 3,131 | ||
| xxx | Total Shareholders’ equity | 29,011 | ||
| Own funds: main features of own instruments issued by the firm |
| Free text. A non-exhaustive list of example features is included below. |
| Own instruments issued by the firm are our standard issued shares. No other instruments issued by TTEL |
Remuneration
The Tibra Group’s remuneration policies and processes are centred on responsible remuneration. Our compensation structure includes a calculated split between fixed and variable compensation, with tailored models for risk takers and back office staff to ensure compliance with both regulatory responsibilities and best practice. All staff are eligible to receive variable remuneration, with ratios differing based on their role in the business.
Our commitment to responsible remuneration extends to the highest levels of leadership, and all remuneration policies are reviewed and signed off by the CEO, Board and members of the senior leadership team.
Variable compensation models are based on individual, team and company performance and are calculated once business results have been realised and audited. Bonus payments are disbursed over deferred instalments to drive business outcomes, address performance and reduce risk.
Employee remuneration (both fixed pay and variable) are reviewed on an annual basis. Employee remuneration is reviewed against market rates and/or changes in the employee’s responsibilities. We engage the services of external consultants to benchmark industry compensation levels and structure to facilitate the review process.
As a firm, the Tibra Group aims to be among the most competitive in the world and uses its remuneration policies to responsibly attract and retain high quality talent across the business.
Employees’ individual compensation is dependent on their role within the business, individual performance against objective targets and overall performance of the company in the period.
The firm has worked with external consultants to build a high performance environment structure that clearly defines and delivers success across the company, teams and individuals.
All employees have specific and objective success measures and minimum standard criteria that feed into the firm’s performance review and remuneration outcomes.
The firm undertakes bi-annual performance reviews to measure delivery and performance against these targets.
Material risk takers comprise the firms’ trading staff and members of the corporate team who are able to influence the exposure of the firm, e.g. risk, tax and members of the senior management team.
In designing the Tibra Group’s bonus models, all types of risk, including but not limited to current and future risk (both financial and non-financial) have been considered, in line with the requirements outlined in SYSC 19G.6.17. All products traded by the firm are highly liquid and are traded on public exchanges. As such, the firm has confidence in the realised profit and loss of strategies in advance of deciding remuneration outcomes, and relies on audited numbers.
The firm’s remuneration policies and practices include mechanisms to ensure that outcomes can be adjusted on an ex-ante and ex-post basis to address regulatory and behavioural/cultural objectives and to drive appropriate risk taking within the group.
The firm does not have a policy of awarding guaranteed remuneration or severance pay and would work to appropriate outside advice on any specific instances.
During the period covered by these disclosures the activity of the firm was extremely limited and responsibility of risk taking lay with one or two key individuals.
Provision of the quantitative information required by MIFIDPRU 8.6.8 would result in identification of material risk takers and their awarded remuneration.
As such the firm is relying on the exemption in MIFIDPRU 8.6.8 (7)(b) not to make quantitative disclosures.