System for managing risks to the current strategy
Moscow Exchange has established a risk management system that enables the timely identification and assessment of risks and the development of mitigation measures.
This system incorporates continuous monitoring of emergencies and assessment of their potential impact on the technical processes of the exchange markets and updating the integrated operational and financial risk management system in line with adopted decisions and procedures. Further development of the risk management system is planned to reduce the vulnerability of business processes and their recovery time, to improve system redundancy based on spacing and duplication of resources and to improve the reliability of communication systems between traders, Moscow Exchange and depository and settlement organisations.
Moscow Exchange has also set up a separate structural unit that is responsible for managing its risks as a market operator. This unit aims to identify and assess risks in a timely manner and to develop mitigation measures. Moscow Exchange developed and approved the Regulations on Managing the Risks of a Market Operator, which establish, in particular:
- the principles of the risk management system related to the Company’s operations;
- the principles and objectives of risk management related to the Company’s activities;
- Regulations on Managing the Risks of a Market Operator;
- the classification of risks inherent to Moscow Exchange;
- the procedure and timeline for an audit of the effectiveness of the risk management system;
- basic guidance and approaches to identifying, assessing and monitoring risks;
- the procedure and timelines for informing Moscow Exchange’s governing bodies, executives and structural units about identified risks;
- a list of measures to be taken by Moscow Exchange to ensure the confidentiality of information about risks, including the confidentiality of risk reports;
- the frequency of stress testing, as well as requirements for the scenarios used for such testing.
Moscow Exchange’s Supervisory Board has formed a Risk Management Committee, which is tasked with:
- developing recommendations on the specification of requirements for a non-business risk management system;
- reviewing Moscow Exchange’s risk management concepts, strategies and policies;
- reviewing, on a regular basis, reports by Moscow Exchange’s management on the operation of the risk management system;
- making recommendations for the governing bodies on the Company’s risk management priority areas in respect of non-business risks.