The role of the Board of a Level 3 Head

10. The Board of a Level 3 Head must:

(a) approve the ITE policy for the Level 3 group;

(b) ensure that adequate systems and controls are in place to identify, measure, manage, monitor and report on material ITEs in the Level 3 group in a timely manner and that those systems and controls are documented;

(c) engage in oversight, which may be via a board committee, of the approach to the identification, measurement, management and monitoring of ITEs and compliance with the ITE policy, which includes receiving regular reviews of which ITEs are deemed to be material to the operations of the Level 3 group; and

(d) review the ITE policy at least annually, to ensure that this policy remains adequate and appropriate for identifying, measuring, managing and monitoring material risks in relation to ITEs.

11. If a prudentially regulated institution in the Level 3 group proposes to accept terms and conditions, in dealing with Level 3 institutions in the group, that are not consistent with terms and conditions that would be negotiated on an arms-length basis in such a dealing, those terms and conditions must first be approved by the Board of the Level 3 Head with justification fully and clearly documented.