(1) The management body of an investment firm shall approve and periodically review the strategies and policies on -

(a) the risk appetite of the investment firm, and

(b) managing, monitoring and mitigating the risks the investment firm is or may be exposed to,

taking into account the macroeconomic environment and the business cycle of the investment firm.

(2) The management body of an investment firm shall devote sufficient time to ensure proper consideration of the matters referred to in paragraph (1) and that it allocates adequate resources to the management of all material risks to which the investment firm is exposed.

(3) An investment firm shall establish reporting lines to the management body for all material risks and for all risk management policies and any changes thereto.

(4) Where the value of an investment firm’s on and off-balance sheet assets is on average greater than €100,000,000 over the four-year period immediately preceding the given financial year, the investment firm shall establish a risk committee composed of members of the management body who do not perform any executive function in the investment firm concerned.

(5) Members of the risk committee referred to in paragraph (4) shall -

(a) have appropriate knowledge, skills and expertise to fully understand, manage and monitor the risk strategy and the risk appetite of the investment firm, and