5.1 The SREP is a process by which the PRA, taking into account the nature, scale and complexity of a firm’s activities, reviews and evaluates the:

• arrangements, strategies, processes and mechanisms implemented by a firm to comply with its regulatory requirements laid down in PRA rules and the CRR;

• risks to which the firm is or might be exposed;

• risks that the firm poses to the financial system; and

• further risks revealed by stress testing.

5.2 As part of the SREP, the PRA will review the firm’s ICAAP and have regard to the risks outlined in the overall Pillar 2 rule in Internal Capital Adequacy Assessment 3.1, the firm's vulnerabilities under reverse stress testing, the governance arrangements of firms, its corporate culture and values, and the ability of members of the management body to perform their duties. The degree of involvement of the management body of the firm will be taken into account by the PRA when assessing the ICAAP, as will the appropriateness of the internal processes and systems for supporting and producing the ICAAP.

5.2A The PRA will consider whether it has reasonable grounds to suspect that money laundering or terrorist financing is being undertaken, or has been committed or attempted, or there is increased risk thereof in connection with that institution. If the PRA has reasonable grounds to suspect such activity or increased risk, it will take appropriate steps.