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FAQs: What is the purpose of the ICAAP Document?

What is the ICAAP Document and what is its purpose?

What is an ICAAP Document?

A firm must review its Internal Capital Adequacy Assessment Process at least annually and record this within an ICAAP Document.

What is the purpose of the ICAAP Document?

The purpose of the Firm’s ICAAP Document is to inform the Board of the ongoing assessment of the risks the firm faces and how they intend to mitigate those risks along with how much capital is needed both now and in the future having considered all mitigating factors.

The ICAAP Document must also clearly explain the firm's assessment process with regards to their internal capital adequacy.

The Firm’s ICAAP document should be reported and approved by the firm’s governing body and it is the responsibility of that governing body that the ICAAP forms an integral part of the firm’s management process and decision making culture.

In addition, the Firm’s ICAAP Document must be available for inspection when the regulator undertakes their Supervisory Review and Evaluation Process (SREP), so this document is of utmost importance.

Therefore, the ICAAP Document should be in a format that can be easily understood at a high level and contain all the relevant information that is necessary for the firm, and the regulator, to make an informed judgement and decision as to the appropriate capital level and risk management approach of the firm.

Technical information on risk measurement methodologies, capital models and all other works carried out to validate the approach (e.g. board papers and minutes, internal or external reviews) could be contained in appendixes, where appropriate.

You may also be interested in ICAAP Document Preparation.


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ICAAP Support Services

If your firm would like information on our ICAAP support services such as assistance in examining your ICAAP to ensure it is appropriately assessed for your current business plan and activities or assistance in documenting this review, please contact us. Our experienced ICAAP Consultants would be happy to help, so send an enquiry or telephone today.

Telephone: 020 3813 2890