Talbot Capital

Talbot Capital Limited - Pillar 3 Disclosure

Overview

These disclosures are made in accordance with the rules of the Directive 2013/36/EU (Capital Requirements Directive (CRD IV)) and the Regulation No 575/2013 (Capital Requirements Regulation (CRR)) of the European Parliament and of the Council of 26 June 2013 relating to minimum capital requirements (known as “Pillar 3” requirements in the Basel II and the new Basel 3 Accord and its European transposition by the CRR). It is this application of the CRD IV and CRR that requires Talbot Capital Limited to make these disclosures.

The new CRR framework now consists of three 'Pillars':

  • Pillar 1: Minimum capital requirements
  • Pillar 2: Supervisory review process: the need to assess whether the capital held under Pillar 1 is sufficient to meet the additional risks not covered by Pillar 1
  • Pillar 3: Disclosure requirements allowing market participants to assess information on a firms' risks, capital and risk management procedures

The Financial Conduct Authority outlines the minimum disclosure requirements. The information below satisfies Talbot Capital Limited Pillar 3 requirement.

Frequency of Disclosure

Talbot Capital Limited will report its Pillar 3 disclosure annually or upon material change. Talbot Capital Limited makes its Pillar 3 disclosure via its website www.talbotcapital.co.uk.

Location and Verification

These disclosures have been validated by the executive director and displayed prominently on the firm’s website. These disclosures are not subject to an audit except to the extent where they are equivalent to disclosures made under accounting requirements.

Scope of Application

This disclosure is made on an individual basis.

Risk Management

The firm undertakes its Individual Capital Adequacy Assessment Process (ICAAP) on an annual basis. The director is however mindful of the changing conditions. The firm’s ICAAP is facilitated by a compliance and risk consultancy. The Pillar 2 (ICAAP) capital requirements are excluded from this summary but are reviewed annually or upon material change.

The director of the firm, in addition to the risk mapping structure of the ICAAP, is very much involved with the day to day running of the company including the continual assessment of risk.  The director manages the firm’s risks through a framework of policy and procedures having regard to relevant laws, standards, principles and rules (including FCA principles and rules) with the aim to operate a defined and transparent risk management framework.

  • Regulatory Risk

The firm’s main risk is one of non-compliance by its underlying Authorised Representatives. Mitigation of this risk is by way of periodic compliance monitoring.

  • Operational Risk

Talbot Capital Limited is an IFPRU €730,000 Full Scope firm and, as such, it is required to calculate operational risk. Operational risk has been calculated from the average of the last three years audited accounts of gross revenue, multiplied by 15%.

  • Liquidity Risk

At the last balance sheet date, Talbot Capital had cash balances and readily realizable investments amounting to £780,521.

Talbot Capital Limited is consistently profit making and has a large amount of capital reserves. The excess capital adequacy equates to £57,000 which is more than six months overhead.

  • Foreign Currency

A number of the firm’s client agreements dictate payment in foreign currencies. Accordingly from time to time the firm maintains modest foreign currency balances. However, these are generally converted to Sterling on a periodic basis consequently currency risk is not considered significant.

  • Trading/Position Risk

Any trading activity the firm conducts will be on a matched principal basis thus position risk is zero.

  • Credit Risk

This has been calculated using the standardised approach of credit risk. The requirement is calculated and the carrying value adjusted as required for appropriate risk.

Capital Resources January 2017

The firm is an IFPRU 730k full scope firm and has a minimum capital requirement of the higher of (i) €730k (£619k), or (ii) operational risk + credit risk + market risk. The total of the firm's operational risk + market risk + credit risk is £98,169.

 

Core Tier 1 Capital

£675,725

Permanent Share Capital

£50,002

Share Premium

n/a

Total Tier 1 Capital after deductions

£675,725

Total Tier 2 capital

n/a

Capital Resources Requirement

£618,644

 

Capital adequacy in compliance with IFPRU 3, 4, 5, 6 & 7.

Remuneration

BIPRU 11.5.18R requires that a firm makes a disclosure of details regarding its remuneration policy.

Talbot Capital Ltd has no employees. The remuneration for the sole director Greg Pritchard is outlined in the firm’s written remuneration policy. Executive directors receive base salaries proportionate with companies of their size, with the added opportunity to enhance their performance by receiving bonuses linked to the performance of the firm.

Talbot Capital Limited has two key business activities and under BIPRU 11.5.20R, the firm does not consider that it is ‘significant in terms of size, internal organisation and nature and scope of its activities’ so is not required to disclose the quantitative information referred to in BIPRU 11.5.18R at the level of senior personnel.

The firm falls within FCA proportionality Level 3 and as such this disclosure is made in line with the requirements for a Level 3 firm (note that the firm was previously classified as a Tier 4 firm but this category no longer exists).

Further Enquiries

Should you have any queries please contact:

Gregory Pritchard

Director

 

Talbot Capital Limited

Becket House

36 Old Jewry

London

EC2R 8DD

 

Approved for publication: January 2017

Contact us

Talbot Capital Ltd
Becket House
36 Old Jewry
London
EC2R 8DD

Tel: +44 (0)20 7397 3969
Email: info@talbotcapital.co.uk