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MIFIDPRU 5.2 Monitoring obligation


1A firm must monitor and control its concentration risk using sound administrative and accounting procedures and robust internal control mechanisms.


1MIFIDPRU 5.2.1R requires a firm to monitor and control all sources of concentration risk. This is not limited to trading book exposures, but also includes any concentration in assets not recorded in a trading book (for example, trade debts) and off-balance sheet items. It also includes any concentration risk that may arise from the following:

  1. (1)

    the location of client money;

  2. (2)

    the location of custody assets;

  3. (3)

    a firm’s own cash deposits; and

  4. (4)