146. Challenges in data collection and assessment of risk are detailed in section 1.9 above, while further challenges to risk-based supervision of DNFBPs include:

• Difficulties in ensuring an adequate level of DNFBP supervision (where risk models/Supervisory programmes usually focus on larger FIs like banks). This is discussed in the context of monitoring in Part A, but is particularly relevant to DNFBP supervision in a single supervisor.

• Notably, in order to achieve "statistical significance", a meaningful number of supervisory engagements (whether on-site or off-site) need to be carried out relative to the population size. In the case of DNFBP sectors with large populations, achieving statistical significance may not be attainable. In these cases a supervisor could instead focus on a sub-group or selection of entities within the population that presents the highest risk.

• Difficulties in ensuring supervisors are specialists and/or sufficiently trained, experienced and knowledgeable in relation to the widely diverse activities carried out by supervised entities.

• DNFBP supervisors, in particular self-regulatory bodies, may not have full legal authority to carry out supervision on all entities within the sector.

147. Strategies to address these challenges:

• Intensive outreach and engagement with and via sectoral associations (which may not be necessarily the self-regulatory bodies), including the provision of specific DNFBP sectoral typologies.