Frequency of Disclosure
Talbot Capital Limited reports its Pillar 3 disclosure annually, or more frequently in the event of a material change to previously disclosed information. Disclosure is normally on the firm’s website at www.talbotcapital.co.uk.
Location and Verification
These disclosures have been validated by the Board and displayed prominently on the firm’s website. These disclosures are not subject to 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 at least an annual basis. The Board is however mindful of the changing conditions in which the firm operates. The firm’s ICAAP is periodically facilitated by an compliance and risk consultancy. The Pillar 2 (ICAAP) capital requirement is also reviewed annually, or upon material change, but is not included in this summary.
The executive director(s) of the firm are very much involved with the day to day running of the company, including the continual assessment of risk. The executive director(s) manage 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 small cohort of Authorised Representatives (ARs), who generally operate in the corporate finance sector. Mitigation of this risk is firstly by careful preselection of ARs who present a low regulatory risk profile, by way of periodic compliance monitoring, and by holding sufficient capital to withstand claims for redress.
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 is calculated from the average of the last three years audited accounts of gross revenue, multiplied by the net relevant indicator of 15%.
Liquidity Risk
At the last balance sheet date, being 31st December 2020, Talbot Capital had cash balances and readily realisable investments amounting to £1,303,276. Against these balances, the firm has a very low level of fixed overheads, so is well covered, even in the event of a downturn in income.
Foreign Currency
Talbot Capital does not have any proprietary foreign currency exposures. All receivables and payables are denominated in sterling
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.
