DISCLOSURES & MARKET DISCIPLINE

According to Part Six of Regulation (EU) 2019/2033 of the European Parliament and of theCouncil on the prudential requirements of investment firms

FOR THE YEAR ENDED 31 DECEMBER 2022

April 2023

Disclosures & Market Discipline Report 2022

CONTENTS
1. Introduction ........................................................................................................................ 5
1.1

Group Information ......................................................................................................... 5

1.2

Classification and prudential requirements .................................................................... 6

1.3

Scope of application ....................................................................................................... 7

1.4

Regulatory framework ................................................................................................... 8

1.5

Risk management objectives and policies ..................................................................... 9

1.5.1 Risk Management Framework .................................................................................. 11
1.5.2 Risk Statement .......................................................................................................... 11
1.4.3 Risk Culture .............................................................................................................. 13
1.6
2.

3.

Declaration of the Management Body ......................................................................... 13

Corporate Governance .................................................................................................... 14
2.1.

Board of Directors........................................................................................................ 14

2.2.

Committees .................................................................................................................. 14

2.3.

Policy on Recruitment.................................................................................................. 15

2.4.

Number of Directorships held by members of the Board ............................................ 16

2.5.

Policy on Diversity ...................................................................................................... 16

2.6.

Information flow on risk to the management body ...................................................... 17

Own Funds ........................................................................................................................ 19
3.1. Composition of regularity own funds .............................................................................. 19
3.2. Main features of capital instruments ............................................................................... 21
3.3. Balance Sheet Reconciliation .......................................................................................... 22

4.

5.

Own funds Requirements ................................................................................................ 24
4.1.

Initial Capital Requirement .......................................................................................... 24

4.2.

Fixed Overheads requirement ...................................................................................... 24

4.3.

K-Factors Requirement ................................................................................................ 25

5.1.1.

Risk to Client ........................................................................................................ 25

5.1.2.

Risk to Market ...................................................................................................... 28

5.1.3.

Risk to Firm .......................................................................................................... 32

5.1.4.

K-Factors Requirement Results ............................................................................ 35

4.4.

Capital Ratios ............................................................................................................... 36

4.5.

Reporting requirements ................................................................................................ 37

4.6.

Concentration risk requirements .................................................................................. 37

4.7.

Liquidity Requirement ................................................................................................. 39

Other Risks ....................................................................................................................... 40
5.1.

Operational Risk .......................................................................................................... 40

GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

2Disclosures & Market Discipline Report 2022

5.2.

Interest Rate Risk ......................................................................................................... 41

5.3.

Reputation Risk ............................................................................................................ 41

5.4.

Strategic Risk ............................................................................................................... 41

5.5.

Business Risk ............................................................................................................... 42

5.6.

Regulatory Risk ........................................................................................................... 42

5.7.

Legal and Compliance Risk ......................................................................................... 42

5.8.

IT Risk ......................................................................................................................... 42

5.9.

Conduct Risk ................................................................................................................ 426.

Internal Capital Adequacy and Risk Assessment Process ........................................... 44

7.

Remuneration policy ........................................................................................................ 45

8.

Investment Policy ............................................................................................................. 50

9.

Environmental, social and governance risks ................................................................. 51

10.

Appendix – Specific References to the IFR ................................................................. 52

GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

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LIST OF TABLES
Table 1: CIF License Information (based on the First Appendix of the Law 87(I)/2017) ........... 5
Table 2: Threshold Criteria........................................................................................................... 7
Table 3: Basis of Consolidation of Group entities for regulatory purposes ................................. 8
Table 4: Risk Appetite areas ....................................................................................................... 12
Table 5: Number of Directorships of the members of the Board of Directors*.......................... 16
Table 6: Information flow on risk to management body ............................................................ 18
Table 7: IF CC1.01 - Composition of regulatory own funds as at 31 December 2022 .............. 19
Table 8: EU IF CCA - Main features of own instruments issued by the firm ............................ 21
Table 9: EU IFCC2 - Reconciliation of regulatory own funds to balance sheet in the audited
financial statements .................................................................................................................... 22
Table 10: Fixed Overheads Requirement ................................................................................... 25
Table 11: Total CMH (average amounts) ................................................................................... 27
Table 12:K-NPR capital requirement ......................................................................................... 28
Table 13: Foreign Exchange Risk capital requirements ............................................................. 29
Table 14: Capital requirements for Commodities risk ............................................................... 30
Table 15: Position risks in equities ............................................................................................. 30
Table 16: Position Risks in Traded Debt Instruments for EUR currency .................................. 31
Table 17: K-TCD Exposures ...................................................................................................... 32
Table 18: Total DTF (average amounts) .................................................................................... 35
Table 19: K-Factors Results ....................................................................................................... 35
Table 20: Own Funds ................................................................................................................. 36
Table 21: Large Exposure Limits ............................................................................................... 38
Table 22: Liquidity Requirements .............................................................................................. 39
Table 23: Remuneration split of staff whose activities have a material impact on the risk profileof the Group. ............................................................................................................................... 48
Table 24: Remuneration split by business area .......................................................................... 49
LIST OF FIGURES
Figure 1: Scope of Application ..................................................................................................... 8
Figure 2: Three Lines of Defence ............................................................................................... 10
Figure 3: Breakdown of K-NPR ................................................................................................. 31
Figure 4: K-TCD Per Asset Class............................................................................................... 33
Figure 5: K-Factors Requirement ............................................................................................... 36
Figure 6: Operational Risk Registry ........................................................................................... 40

GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

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1. INTRODUCTION
1.1 Group Information
GBE Holding GmbH (hereinafter, the “Group”) was incorporated in the Germany withregistration number HRB 187059 and it is the parent of GBE Brokers Ltd (the “CIF” or“Company”) which was incorporated in the Republic of Cyprus on 5 August 2013 withregistration number HE 324205 and licensed by the Cyprus Securities and Exchange
Commission (hereinafter the “CySEC”) with number CIF 240/14.
The table below illustrates the current licence information of the CIF:

Financial Instruments

Table 1: CIF License Information (based on the First Appendix of the Law 87(I)/2017)
Investment Services and Activities
Ancillary Services
1
2
3
4
5
6
7
8
1
2
3
4
5
6
7
✓ ✓ ✓
✓ ✓
1
✓ ✓ ✓
✓ ✓
2
✓ ✓ ✓
✓ ✓
3
✓ ✓ ✓
✓ ✓
4
✓ ✓ ✓
✓ ✓
5
✓ ✓ ✓
✓ ✓
✓
6
✓ ✓ ✓
✓ ✓
7
✓ ✓ ✓
✓ ✓
8
✓ ✓ ✓
✓ ✓
9
✓ ✓
10 ✓ ✓ ✓11
The CIF is authorised to provide the following Investment Services, in accordance with Part Ιof the First Appendix of the Law 87(I)/2017:• Reception and transmission of orders in relation to one or more financial instruments• Execution of orders on behalf of clients• Dealing on own account
The CIF is authorised to provide the following Ancillary Services, in accordance with Part ΙI of
the First Appendix of the Law 87(I)/2017:• Safekeeping and administration of financial instruments for the account of clients,
including custodianship and related services such as cash/collateral management.
• Granting credits or loans to one or more financial instruments, where the firm granting
the credit or loan is involved in the transaction• Foreign exchange services where these are connected to the provision of investment
services.
The CIF is authorised to provide the aforementioned investment and ancillary services, asapplicable for each service, for the following Financial Instruments, in accordance with Part IIIof the First Appendix of the Law 87(I)/2017:
1.
2.
3.

Transferable Securities
Money Market Instruments
Units in Collective Investment Undertakings

GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

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4.

Options, futures, swaps, forward rate agreements and any other derivative contracts relating
to securities, currencies, interest rates or yields, or other derivatives instruments, financial
indices or financial measures which may be settled physically or in cash.
5. Options, futures, swaps, forward rate agreements and any other derivative contracts relating
to commodities that must be settled in cash or may be settled in cash at the option of oneof the parties (otherwise than by reason of a default or other termination event).
6. Options, futures, swaps, and any other derivative contract relating to commodities that canbe physically settled provided that they are traded on a regulated market or/and an MTF
7. Options, futures, swaps, forwards and any other derivative contracts relating tocommodities, that can be physically settled not otherwise mentioned in point 6 of Part III
and not being for commercial purposes, which have the characteristics of other derivative
financial instruments, having regard to whether, inter alia, they are cleared and settled
through recognised clearing houses or are subject to regular margin calls
8. Derivative instruments for the transfer of credit risk
9. Financial contracts for differences
10. Options, futures, swaps, forward rate agreements and any other derivative contracts relating
to climatic variables, freight rates, emission allowances or inflation rates or other official
economic statistics that must be settled in cash or may be settled in cash at the option of
one of the parties (otherwise than by reason of a default or other termination event), as wellas any other derivative contract relating to assets, rights, obligations, indices and measures
not otherwise mentioned in this Part, which have the characteristics of other derivative
financial instruments, having regard to whether, inter alia, they are traded on a regulated
market or an MTF, are cleared and settled through recognised clearing houses or are subject
to regular margin calls.
1.2 Classification and prudential requirements
The Investment Firms Directive (EU) 2019/2034 (“IFD”) and the Investment Firm Regulation,
Regulation (EU) 2019/2033 (“IFR”) entered into force on 26 July 2021, introducing a newclassification system for investment firms, based on their activities, systemic importance, size
and interconnectedness. All investment firms are classified as Class 1, 2 or 3 Investment Firms.
Class 1 Investment Firms are the largest and most interconnected investment firms, with risk
profiles similar to those of significant credit institutions, have equal treatment with credit
institutions in the sense of a level playing field accordingly, and they fall entirely under the
Regulation EU) No 575/2013 (“CRR”).
Investment Firms categorized as Class 2 and Class 3 have had the most impact following the
introduction of the new prudential framework as their capital requirements, reporting
requirements and internal governance policies are subject to the provisions of IFR/IFD.
Cyprus Investment Firms (“CIFs”) that meet all of the below criteria are categorised as Class 3
Investment Firms while when they exceed any of the following specific size thresholds, they are
categorised as Class 2 Investment Firms.

GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

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Table 2: Threshold Criteria
No.
Metric1.
Assets Under Management
2.
Client orders handled – cash trades3.
Client orders handled – derivative trades
4.
Assets safeguarded and administered
5.
Client money held
6.
On- and off-balance sheet total
7.
Total annual gross revenue from investment
services and activities

Thresholds<€1.2 billion< €100 million per day<€1 billion per day
zero
zero
< €100 million< €30 million

Further to the above, the CIF is categorized as a Class 2 Investment Firm since it does not meetall of the above criteria and as such it should maintain own funds of at least the higher between:
A. Permanent minimum capital requirement
The permanent minimum capital requirement of the Group is €750k since it is authorized toprovide the investment service of “dealing on own account”.
B. Fixed overhead requirements
The Fixed Overheads Requirement is calculated as one quarter (¼) of the previous year fixed
expenses (based on audited figures).
C. K-Factors requirement
The K-Factors are quantitative indicators that reflect the risk that the IFR/IFD prudential regime
intends to address. Specifically, capital requirements from applying the K-factors formula(pursuant to Article 15 of the IFR) is the sum of the Risk to Client (‘RtC’), Risk to Market (‘RtM’)
and Risk to Firm (‘RtF’) proxies.
1.3 Scope of application
The Market Disclosures Report (the ‘Report’) is prepared in accordance with the disclosure
requirements as laid out in Part Six of the IFR. Investment firms are required to disclose theircapital resources, capital requirements, remuneration policies, practices and governancestandards.
The Report has as a starting point the financial information used in the Financial Statements
which are prepared in accordance with the International Financial Reporting Standards (“IFRS”).
As the two documents serve different purposes, the reported figures illustrate differences, which
lie on the differences of the fundamental concepts between the IFR and the IFRS.
The Group is required to comply with the market disclosures requirements on a consolidated
basis. As at 31 December 2022, the basis of consolidation of the Group entities for accounting
and prudential purposes is presented in the Group Structure below:

GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

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Disclosures & Market Discipline Report 2022

Figure 1: Scope of Application
The subsidiary companies, their activities and their consolidation method as at 31 December
2022 are presented in the table below.
Table 3: Basis of Consolidation of Group entities for regulatory purposes
Method of
Method of accounting
Description ofName of the entity
regulatory
consolidation
the entity
consolidation
GBE Holding GmbH
Full consolidation
Full consolidation
Financial Holding
GBE brokers Ltd

Full consolidation

Full consolidation

Investment Firm

1.4 Regulatory framework
The Report has been prepared in accordance with the regulatory regime for investment firms theEuropean Parliament has adopted, the IFR and the IFD as well as the relevant provisions of theLaw 165(I)/2021 “The Prudential Supervisions for Investment Firms Law of 2021” (the “Law”)
and the Law 164(I)/2021, amending Law 97(I)/2021, “The Capital Adequacy Investment Firms
Law of 2021”.
The IFR establishes the prudential requirements in terms of own funds, level of minimum capital,
concentration risk, liquidity requirements and level of activity with respect to small and noninterconnected investment firms.
Furthermore, IFR introduced significant changes in the prudential regulatory regime applicable
to Investment Firms including a new classification system, an amended minimum initial capitaland minimum capital ratios, changes to the calculation of the capital requirements, the reporting
requirements and the internal governance policies and the introduction of the K-Factors
methodology and new measures relating to liquidity requirements, large exposures andconsolidation requirements.

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The Regulatory framework consists of:• Basic Prudential Requirement - Covers minimum capital and liquidity requirements.
• Internal Capital and Liquidity Adequacy Assessment – Regulates the investment firm’s
accountability to the regulator for capital and liquidity adequacy. If the regulator deems thecapital to be insufficient, a corrective requirement can be imposed on the company in theform of what is known as a ‘SREP’.
• Disclosures Requirement - require the disclosure of information regarding the prudential
requirements, risk management and principles of the remuneration policy.
The Group has a formal policy, approved by the Board of Directors (‘Board’ or ‘BoD’), which
details its approach in complying fully with the market disclosures requirement as laid out in Part
Six of the IFR.
The provisions on disclosure requirements are described in Articles 46 to 53 of the IFR. In
addition, these disclosures must be verified by the external auditors of the CIF. The CIF will be
responsible to submit its external auditors’ verification report to CySEC. The Group has included
its risk management disclosures on its website.
Materiality is based on the criterion that the omission or misstatement of information would be
likely to change or influence the decision of a reader relying on that information for the purposeof making economic decisions. Where the Group has considered a disclosure to be immaterial,
this was not included in the document.
Frequency
The Group’s policy is to publish the disclosures required on an annual basis. The frequency of
disclosure will be reviewed should there be a material change in approach used for the calculationof capital, business structure or regulatory requirements.
Location of publication
The market disclosures are published on the Group’s websites:••www.gbebrokers.com
www.gbeprime.com

Verification
The market disclosures are subject to internal review and validation prior to being submitted to
the Board for approval. The market disclosures have been reviewed and approved by the Board.
In addition, the Remuneration disclosures have been reviewed by the Risk Manager.
1.5 Risk management objectives and policies
To ensure effective risk management, the Group has adopted the Three Lines of Defence model,
with clearly defined roles and responsibilities.

GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

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First Line of DefenceManagers are responsible for establishing an effective control framework within their area of
operation and identifying and controlling all risks so that they are operating within theorganisational risk appetite and are fully compliant with the Group’s policies and whereappropriate defined thresholds. First Line of Defence acts as an early warning mechanism for
identifying (or remedying) risks or failures.
Second Line of Defence
The Risk Management Function is responsible for proposing to the Board appropriate objectives
and measures to define the Group’s risk appetite and for devising the suite of policies necessary
to control the business including the overarching framework and for independently monitoring
the risk profile, providing additional assurance where required. The Risk Management Function
will leverage their expertise by providing frameworks, tools and techniques to assist management
in meeting their responsibilities, as well as acting as a central coordinator to identify enterprisewide risks and make recommendations to address them. Integral to the mission of Second Lineof Defence is identifying risk areas, detecting situations/activities in need of monitoring anddeveloping policies to formalise risk assessment, mitigation and monitoring.
Third Line of Defence
Comprised by the Internal Audit Function which is responsible for providing assurance to theBoard on the adequacy of design and operational effectiveness of the systems of internal controls.
Internal Audit undertakes on-site inspections/visits to ensure that the responsibilities of each
Function are discharged properly (i.e. soundly, honestly and professionally) as well as reviewing
the Group’s relevant policies and procedures. Internal Audit works closely with both the Firstand Second Lines of Defence to ensure that its findings and recommendations are taken into
consideration and followed, as applicable.

Figure 2: Three Lines of Defence

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1.5.1 Risk Management Framework
Managing risk effectively in a Group operating in a continuously changing risk environment
requires a strong risk management culture. As a result, the Group has established an effective
risk oversight structure and the necessary internal organisational controls to ensure that the Group
undertakes the following:••••

The adequate risk identification and management
The establishment of the necessary policies and procedures
The setting and monitoring of the relevant limits andCompliance with the applicable legislation

The Board meets on a regular basis and receives updates on risk and regulatory capital mattersfrom management. The Board reviews regularly (at least annually) written reports concerningcompliance, risk management and internal audit policies, procedures and work as well as theGroup’s risk management policies and procedures as implemented by Management.
As part of its business activities, the Group faces a variety of risks, the most significant of which
are described further below. The Group holds regulatory capital against three all-encompassing
main types of risk: credit risk, market risk and operational risk.
1.5.2 Risk Statement
The Group's activities expose it to a variety of risks, and in particular to credit risk, market risk,
operational risk, compliance risk, regulatory risk, reputational risk, group risk, strategic risk,
liquidity risk, conduct risk etc. The Group, through its operations, has significant exposure to theeconomies and financial markets.
As regards the management of the risks arising from the current macroeconomic and politicaluncertainty (heightened inflation, Ukrainian crisis, climate crisis etc.), the Group is following the
local government guidelines, enhancing its onboarding procedures and closely monitoring its
capital and liquidity positions.
Risk Strategy
The risk strategy of the Group is the responsibility of the Board, which formulates it and is
responsible for monitoring its implementation. This is achieved through the development of risk
management processes and procedures as well as through an assessment of the risks undertaken
and the effectiveness of the risk management framework, given the Group’s business model. One
important characteristic of the Group’s risk strategy is the alignment with the strategic andoperational targets that are set by the Board.
The risks that arise from the implementation of the Group’s strategic and business plans are
regularly analyzed in order to ensure the adequacy of the relevant policies, procedures andsystems.
The risk strategy of the Group aims to provide to both Senior Management and employees ageneral risk framework for the management of the different types of risk in line with the overallrisk management and risk bearing capacity of the Group. The Group recognizes the importance
GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

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of risk management to its business’ success and therefore the overall objective is to establish
effective risk management policies that are able to mitigate the Group’s exposure to the various
risks.
Risk Appetite
Risk appetite is the level and type of risk a firm is able and willing to assume in its exposuresand business activities, given its business objectives and obligations to stakeholders. Risk
appetite is generally expressed through both quantitative and qualitative means and should
consider extreme conditions, events and outcomes. In addition, risk appetite should reflectpotential impact on earnings, capital and funding/liquidity. The Group has a low-risk appetite inrespect to investing and to managing business and operational activities.
According to the Financial Stability Board (FSB), an appropriate risk appetite framework (RAF)should enable risk target, risk appetite, risk limits and risk profile to be considered for businesslines and legal entities as relevant, and within the group context.
The Risk appetite framework is defined as the overall approach, including policies, processes,
controls, and systems through which risk appetite is established, communicated, and monitored.
Moreover, it includes a risk appetite statement, risk limits, and an outline of the roles andresponsibilities of those overseeing the implementation and monitoring the RAF. The RAF
should consider material risks to the financial institution, as well as to the institution’s reputation
vis-à-vis policyholders, depositors, investors and customers. The RAF aligns with theinstitution's strategy.
The Group is assessing its risk appetite in respect to investing and to managing business andoperational activities while the Risk Appetite Statement is prepared by the Risk Manager andapproved by the Board of Directors.
Table 4: Risk Appetite areas
Indicator
Minimum Own Fund Requirement
Common Equity Tier 1 Ratio4
AT1 Capital Ratio4
Total Capital Ratio4
Liquid Assets
Return on Assets
Retained Earnings / Total Equity
Notes

Normal 1>€6,800k
>100%
>125%
>150%
>€530k
≥5.00%≥10.00%Warning 2<€6,800k
<75%
<100%
<125%
<€530k
<5.00%<10.00%Limit 3
€5,720k
56%
75%
100%
€448k
0.00%
5.00%

1. The level of the indicator is within the acceptable limits as per the Group’s risk appetite.
2. The Group should take proactive actions in order to ensure that the level of the indicator willremain above the acceptable limits.
3. The level of the indicator falls below the acceptable limits and as such the Group should proceedwith the required actions in order to restore the level of the said indicator to the normal
predefined levels.
4. Additional own funds requirement and additional 18.75% total capital ratio requirement as per
the paragraph 18 of the Law 20(I)/2016 have been taken into consideration for Normal and
Warning thresholds.
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The Risk Appetite framework has been designed to create links to the strategic long-term plan,
capital planning and the Group’s risk management framework.
The Board approves the Group’s corporate strategy, business plans, budget, long term plan and
ICARA. The Group employs mitigation techniques defined within the policies, to ensure risks
are managed within its Risk Appetite.
1.4.3 Risk Culture
Risk culture is a critical element in the Group’s risk management framework and procedures.
Management considers risk awareness and risk culture within the Group as an important partof the effective risk management process. Ethical behavior is a key component of the strongrisk culture and its importance is also continuously emphasised by the management.
The Group is committed to embedding a strong risk culture throughout the business where
everyone understands the risks they personally manage and are empowered and qualified totake accountability for them. The Group embraces a culture where each of the business areas
are encouraged to take risk–based decisions, while knowing when to escalate or seek advice.
1.6 Declaration of the Management Body
The Board is required to proceed with an annual declaration on the adequacy of the Group’s risk
management framework and ensure that the risk management arrangements and systems offinancial and internal control in place are in line with the Group’s risk profile.
The Group’s risk management framework is designed to identify, assess, mitigate and monitor
all sources of risk that could have a material impact on the Group’s operations. The Board
considers that the Group has in place adequate systems and controls with regards to its size, risk
profile and strategy and an appropriate array of assurance mechanisms, properly resourced andskilled, to avoid or minimise loss. Key ratios and figures representing interaction of
the risk profile and the stated risk tolerances are deemed to be proprietary information.

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2. CORPORATE GOVERNANCE
The systems of risk management and internal control include risk assessment, management or
mitigation of risks, including the use of control processes, information and communication
systems and processes for monitoring and reviewing their continuing effectiveness.
The risk management and internal control systems are embedded in the operations of the Groupand are capable of responding quickly to evolving business risks, whether they arise from factors
within the Group or from changes in the business environment.
2.1. Board of Directors
As at 31 December 2022, the Board comprises of two executive directors.
The Board has the ultimate and overall responsibility for the investment firm and defines,
oversees and is accountable for the implementation of the governance arrangements. The Board
is responsible for ensuring that the Group complies at all times with its obligations under the
Law. In doing so, the Board approves and periodically reviews the effectiveness of the policies,
arrangements and procedures put in place, whilst if needed, takes appropriate measures to address
any deficiencies.
The Group has in place the Internal Operations Manual which lays down the activities, processes,
duties and responsibilities of the Board, Committees, Senior Management and staff of the Group.
It also implements and maintains adequate risk management policies and procedures which
identify the risks relating to the activities, processes and systems, and where appropriate, sets thelevel of risk tolerated by the Group. The Group adopts effective arrangements, processes andsystems, in light of that level of risk tolerance, where applicable.
The Board has the overall responsibility for the establishment and oversight of the Risk
Management Framework. The Board satisfies itself that financial controls and systems of risk
management are robust.
2.2. Committees
Establishing committees helps management bodies in their supervisory function. Committees
draw on the specific knowledge and areas of expertise of individual management body members.
While committees should prepare decisions and make recommendations to the management bodyin its supervisory function, the management body has the overall responsibility.
According to Circular C487, if the CIF meets the definition of ‘significant CIF’ as set out in
Section 26(8)(a) of the Law, it is obligated to establish a Risk, Remuneration and Nomination
Committee. The CIF does not fall under the definition of ‘significant CIF’ since its average on
and off-balance sheet items during the four preceding years were less than €100m. Therefore, it
is not required to comply with the additional regulatory requirements indicated above
However, the CIF has established a Risk Management Committee, in order to ensure theeffectiveness of the risk management policies and procedures.

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Risk Management Committee
The Risk Management Committee of the Company is formed with the view of ensuring theefficient monitoring of the risks inherent in the provision of investment and ancillary services to
Clients, as well as the overall risks underlying the operations of the Company. To this effect, theCompany has adopted and maintains an applied risk management framework/policy, which
identifies the risks relating to the Company’s activities, processes and systems and sets the risk
tolerance levels of the Company. The Risk Management Committee bears the responsibility tomonitor the adequacy and effectiveness of the risk management framework/policy andprocedures that are in place, the level of compliance by the Company and its relevant persons
with the policies and procedures adopted as well as the adequacy and effectiveness of measurestaken to address any deficiencies with respect to those policies and procedures that are in place,including failures by the Company’s relevant persons to comply with those policies andprocedures. Furthermore, the risk management committee advises the management body on theinvestment firm’s overall current and future risk appetite and strategy and assists the management
body in overseeing the implementation of that strategy by senior management. During 2022 theRisk Management Committee met 2 times.
2.3. Policy on Recruitment
Recruitment into the Board combines an assessment of both technical capability andcompetency skills referenced against the Group’s leadership framework. Members of the Board
possess sufficient knowledge, skills and experience to perform their duties. The overallcomposition of the Board reflects an adequately broad range of experiences to be able tounderstand the CIF’s activities, including the main risks to ensure the sound and prudent
management of the Group as well as sufficient knowledge, of the legal framework governing
the operations of a CIF.
Board of Directors Recruitment
The management of a CIF must be undertaken by at least two persons meeting the requirements
below:
1. Members of the Board shall at all times be of sufficiently good repute and possess
sufficient;knowledge, skills and experience to perform their duties. The overall composition of theBoard of directors shall reflect and adequately board range of experiences.
2. All Board members shall commit sufficient time to perform their functions in the Group;
3. The number of directorships which may be held by a member of the Board at the sametime shall take into account individual circumstances and the nature, scale and complexityof the Group’s activities. Unless representing the Republic, members of the Board of a
CIF that is significant in terms of its size, internal organisation and the nature, the scope
and the complexity of its activities shall not hold more than one of the following
combinations of directorships at the same time:o one executive directorship with two non-executive directorships;o four non-executive directorships.
4. For the purposes of subsection above, the following shall count as a single directorship:a) Executive or non-executive directorships held within the same group;b) Executive or non-executive directorships held within:

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i.

5.
6.
7.
8.

institutions which are members of the same institutional protection
scheme provided that the conditions set out in Article 113, paragraph (7)of CRR are fulfilled; orii.
undertakings (including non-financial entities) in which the CIF holds a
qualifying holding.
Directorships in organisations which do not pursue predominantly commercial objectives
shall not count for the purposes of the previous subsection;
The Commission may allow members of the Board of Directors to hold additional nonexecutive directorships;
The Board of Directors shall collectively possess adequate knowledge, skills experience
to be able to understand the Group’s activities, including the principal risks; andEach member of the Board of Directors shall act with honesty, integrity and independenceof mind to effectively assess and challenge the decisions of the senior management where
necessary and to effectively oversee and monitor the decision-making of the management.

2.4. Number of Directorships held by members of the Board
The table below discloses the number of directorships held by members of the management bodyof the Group, including GBE brokers Ltd and any other companies belonging to the same group,
as at 31 December 2022. Directorships in organisations which do not pursue predominantly
commercial objectives such as non-profit or charitable organisations, are not taken into accountfor the purposes of the below.
Table 5: Number of Directorships of the members of the Board of Directors*
Director

Entity Name

NiklasNeubauer

GBE Brokers Ltd

Rifat Sayim

GBE Holding GmbH

Ben-Florian
Henke
Kyriakos
Karoullas

GBE Holding GmbH
GBE Brokers Ltd

Olga Kvasova

GBE Brokers Ltd

AndreasPsindros

GBE Brokers Ltd

Function

No. of
Executive
Directorships

Number of
Non-Executive
Directorships

3

-

2

-

2

-

1

-

-

1

-

2

Executive
Director
Executive
Director
Executive
Director
Executive
Director
NonExecutive
Director
NonExecutive
Director* The information in this table is based only on representations made by the directors of the Group.

2.5. Policy on Diversity
The Group is committed to promote a diverse and inclusive workplace at all levels, reflective of
the communities in which it does business. It approaches diversity in the broadest sense,
recognizing that successful businesses flourish through embracing diversity into their businessstrategy, and developing talent at every level in the organisation. For this purpose, the Group
GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

16Disclosures & Market Discipline Report 2022

takes into consideration various aspects such as broad industry experience, knowledge,
independence, gender, age, cultural and educational background, for the Board appointments. In
order to support a diverse composition of the management body the Group ensures that there isno discrimination based on gender, race, colour, ethnic or social origin, genetic features, religion
or belief, membership of a national minority, property, birth, disability, age, or sexual orientation.
The Group aims at an appropriate representation of all genders within the management body andensure that the principle of equal opportunities is respected when selecting members of the
management body.
Diverse pool of Candidates
To enable the Group to shortlist and eventually hire the members from the diverse backgrounds,
it is essential to prioritise the formation of the diverse candidate pool. When gathering thecandidates pool and shortlisting the candidates the Group primarily focuses on the experience,skills and abilities of the candidate to contribute to the Group’s business processes and specificskills needed. Secondly, the Group assesses the divers qualifications of the candidates andevaluate the best fit for the position.
Skills and Experience
The Board of Directors, via its members, shall possess a well-balanced broad set of qualities andcompetences, such as sufficient knowledge and relevant experience, which would be appropriate
and essential for the requirements of the conduct of Group’s business. An assessment of thespecific experience and skills, as defined in Group’s Recruitment Policy and Suitability
assessment as defined in Training and Education Policy, needs to ensure the optimum blend of
the potential individual and the aggregate capability in regard to the Group’s long-term strategicplan.
Independence
The Board of Directors includes a composition of Executive and Non-executive Directors. This
is to assure a strong element of independence in the Board and each member shall be of sufficientcalibre and stature for their views to carry weight. Only where independence is promoted canmember of the Board act with honesty, integrity and independence of mind necessary to be able
to properly assess and challenge the decisions of a senior management when needed and toeffectively oversee and monitor management decision-making.
Equality
The Group is committed to maintaining an environment of general respect to all people, be it its
employees, employees of third parties (such as contractors and service providers), Clients andpotential Clients, business associates, etc. in all business dealings and achieving a workplaceenvironment and business culture free of harassment and discrimination on the basis of gender,
physical or mental state, race, ethnic background, religion, age or family status.
The same principle applies to the selection of potential candidates for appointment to the Board.
2.6. Information flow on risk to the management body
Risk information flows up to the Board directly from the business departments and control
functions. The Board ensures that it receives on a frequent basis, at least annually written reports
GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

17Disclosures & Market Discipline Report 2022

regarding Internal Audit, Compliance, Money Laundering and Terrorist Financing and Risk
Management issues and approves the ICARA report as shown in the table below:
Table 6: Information flow on risk to management body
Report Name
Owner of Report
Recipient
SeniorRisk Manager’s
1
Risk Manager
Management,
ReportBoard, CySEC
Senior
2 Form 165-01
Risk Manager
Management,
Board, CySEC
Senior
3 ICARA Report
Risk Manager
Management,
Board
Senior
4 Market Disclosures Risk Manager
Management,
Board
Senior
5 Risk Register
Risk Manager
Management,
Board
Senior
6 Compliance Report Compliance Officer Management,
Board, CySEC
SeniorInternal Audit
7
Internal Auditor
Management,
ReportBoard, CySEC
Anti-money
Anti-money
Senior8 laundering
laundering
Management,(AMLCO) ReportCompliance Officer Board, CySEC
SeniorAudited Financial
9External Auditor
Management,
Statements
Board, CySEC
Form 165-03
Senior‘Prudential
10
Risk Manager
Management,
Supervision
Board, CySEC
Information’
SeniorForm 20-01
11
Risk Manager
Management,(Recovery Plan)*
Board, CySEC
SeniorResolution
Management,
12
Risk Manager
Templates (XBRL)Board, Resolution
Authority (CBC)

Frequency
Annually

Quarterly

Annually

Annually

Annually

Annually

Annually

Annually

Annually

Annually

Every Two Years

Annually*CIF which are subject to simplified obligations for the purpose of preparing their recovery plansaccording to Directive DI20-01

Furthermore, the Group believes that the risk governance processes and policies are of at mostimportance for its effective and efficient operation. The processes are reviewed and updated on
an annual basis or when deemed necessary.
GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

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Disclosures & Market Discipline Report 2022

3. OWN FUNDS
Own Funds (also referred to as capital resources) is the type and level of regulatory capital thatmust be held to enable the Group to absorb losses. During the year under review, the primaryobjective of the Group with respect to capital management was to ensure that it complied with
the imposed capital requirements with respect to its own funds and that the Group maintained
healthy capital ratios in order to support its business.
The Group throughout the year under review managed its capital structure and made adjustments
to it in light of the changes in the economic and business conditions and the risk characteristics
of its activities.
3.1. Composition of regularity own funds
The Group shall disclose information relating to their own funds according to Article 49(a) and(c) of IFR. The following information provides a full reconciliation of the Common Equity Tier
1 (CET1) and Additional Tier 1 (AT1) instruments and Tier 2 (T2) instruments issued by theGroup. The Group’s regulatory capital comprises fully of CET1 capital while it has not issued
any AT1 or T2 capital. The composition of the Group’s Own Funds which is cross-referenced tothe corresponding rows in table EU IF CC2 is shown below:
Table 7: IF CC1.01 - Composition of regulatory own funds as at 31 December 2022
Source based
Common Equity Tier 1 (CET1) capital: instruments
Solo
Conso
on reference
and reserves
€’000
€’000
numbers of
EU IF CC2
1 OWN FUNDS
15,56823,7892 TIER 1 CAPITAL
15,56823,7893 COMMON EQUITY TIER 1 CAPITAL
15,56823,7894 Fully paid up capital instruments
2,000
100
Ref 1 (Equity)
5 Share premium
N/A
6 Retained earnings
13,661
Ref 2 (Equity)
7 Accumulated other comprehensive income
N/A
8 Other reserves
N/A
9 Minority interest given recognition in CET1 capital
N/A
10 Adjustments to CET1 due to prudential filters
N/A
11 Other funds
N/A
12
13
14
15
16
17
18
19

(-)TOTAL DEDUCTIONS FROM COMMONEQUITY TIER 1(-) Own CET1 instruments(-) Direct holdings of CET1 instruments(-) Indirect holdings of CET1 instruments(-) Synthetic holdings of CET1 instruments(-) Losses for the current financial year(-) Goodwill(-) Other intangible assets

(1)

-

(1)

(1)

GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

N/A
N/A
N/A
N/A
N/A
N/A
Ref 1 (Assets)

19

Disclosures & Market Discipline Report 2022

20
21
22

23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50

(-) Deferred tax assets that rely on future profitability
and do not arise from temporary differences net of
associated tax liabilities(-) Qualifying holding outside the financial sector
which exceeds 15% of own funds(-) Total qualifying holdings in undertaking otherthan financial sector entities which exceeds 60% of its
own funds(-) CET1 instruments of financial sector entities
where the institution does not have a significant
investment(-) CET1 instruments of financial sector entities
where the institution has a significant investment(-)Defined benefit pension fund assets(-) Other deductions
CET1: Other capital elements, deductions andadjustments
ADDITIONAL TIER 1 CAPITAL
Fully paid up, directly issued capital instruments
Share premium(-) TOTAL DEDUCTIONS FROM ADDITIONALTIER 1(-) Own AT1 instruments(-) Direct holdings of AT1 instruments(-) Indirect holdings of AT1 instruments(-) Synthetic holdings of AT1 instruments(-) AT1 instruments of financial sector entities where
the institution does not have a significant investment(-) AT1 instruments of financial sector entities where
the institution has a significant investment(-) Other deductions
Additional Tier 1: Other capital elements, deductions
and adjustments
TIER 2 CAPITAL
Fully paid up, directly issued capital instruments
Share premium(-) TOTAL DEDUCTIONS FROM TIER 2(-) Own T2 instruments(-) Direct holdings of T2 instruments(-) Indirect holdings of T2 instruments(-) Synthetic holdings of T2 instruments(-) T2 instruments of financial sector entities where
the institution does not have a significant investment(-) T2 instruments of financial sector entities where
the institution has a significant investment
Tier 2: Other capital elements, deductions andadjustments

-

-

N/A

-

-

N/A

-

-

N/A

-

-

N/A

-

-

N/A

-

-

N/A
N/A

(92)

(92)

Ref 2 (Assets)

-

-

N/A
N/A
N/A

-

-

N/A
N/A
N/A
N/A
N/A

-

-

N/A

-

-

N/A
N/A

-

-

-

-

N/A

-

-

N/A

N/A
N/A
N/A
N/A
N/A
N/A
N/A

*

According to the Circular C334, CIFs should deduct the additional Cash Buffer of 3 perthousand of the eligible funds and financial instruments of their clients as at the previous year
calculated according to paragraph 11(6) of the Directive DI87-07 (operation of the ICF).
GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

20Disclosures & Market Discipline Report 2022

3.2. Main features of capital instruments
The Group shall disclose the main features of the CET1 and AT1 instruments and Tier 2
instruments issued according to Article 49(b) of IFR. Therefore, the Group’s capital instruments’
main features are outlined below:
Table 8: EU IF CCA - Main features of own instruments issued by the firm
No Item
1 Issuer
Unique identifier (e.g. CUSIP, ISIN or Bloomberg
2
identifier for private placement)
3 Public or private placement
4 Governing law(s) of the instrument
Instrument type (types to be specified by each5
jurisdiction)
6 Amount recognised in regulatory capital
7 Nominal amount of instrument
8 Issue price
9 Redemption price
10 Accounting classification
11 Original date of issuance
12 Perpetual or dated
13 Original maturity date
14 Issuer call subject to prior supervisory approval
Optional call date, contingent call dates and15
redemption amount
16 Subsequent call dates, if applicable
Coupons / dividends
17 Fixed or floating dividend/coupon
18 Coupon rate and any related index
19 Existence of a dividend stopper
Fully discretionary, partially discretionary or
20
mandatory (in terms of timing)
Fully discretionary, partially discretionary or
21
mandatory (in terms of amount)
22
Existence of step up or other incentive to redeem
23
Noncumulative or cumulative
24 Convertible or non-convertible
25
If convertible, conversion trigger(s)26
If convertible, fully or partially27
If convertible, conversion rate28
If convertible, mandatory or optional conversion
If convertible, specify instrument type convertible
29
into

CET1 Capital
GBE Holding GMBH
n/a
PrivateGerman Company Law

GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

Ordinary Shares
€100k
€100k
€1
N/A
Shareholders’ Equity
28 March 2017
PerpetualNo maturity
N/A
N/A
N/A
Floating
N/A
No
N/A
N/A
No
Non-cumulative
Non-convertible
N/A
N/A
N/A
N/A
N/A

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Disclosures & Market Discipline Report 2022

30
31
32
33
34
35
36
37
38

If convertible, specify issuer of instrument it
converts into
Write-down features
If write-down, write-down trigger(s)If write-down, full or partial
If write-down, permanent or temporary
If temporary write-down, description of write-up
mechanism
Non-compliant transitioned features
If yes, specify non-compliant features
Link to the full term and conditions of the instrument(signposting)

N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A

3.3. Balance Sheet Reconciliation
The Group shall disclose the balance sheet included in their audited financial statements for the
year-end disclosures. As at the 31 December 2022, the reconciliation of assets and liabilities andregulatory Own Funds is shown in the following table:
Table 9: EU IFCC2 - Reconciliation of regulatory own funds to balance sheet in theaudited financial statements
Balance sheet as in
Under
Cross
audited financial
regulatory scopereference
No. Itemstatementsof consolidation
to EU IF
€’000
€’000
CC1
Assets - Breakdown by asset classes according to the balance sheet in the published/audited
financial statements
Property, plant and
1
54
54
N/A
equipment
2 Right-of-use assets
89
89
N/A
3 Intangible assets
1
1
19
4 Investors' compensation fund62
62
27
5 Loans receivable
454
1,090
N/A
6 Receivables
110
220
N/A
7 Loans receivable
616
N/A
Financial assets at fair value
8
914
N/A
through profit or loss
9 Refundable taxes
238
239
N/A
10 Cash at bank
37,277
43,231
N/A
Total Assets
38,286
46,514
Liabilities - Breakdown by liability classes according to the balance sheet in the
published/audited financial statements
1 Trade and other payables
22,531
22,538N/A
2 Lease liabilities
94
94
N/A
Total Liabilities
22,625
22,633
GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

22Disclosures & Market Discipline Report 2022

Shareholders' Equity
1 Share Capital
2 Retained earnings
3 Non-controlling interests
Total Shareholders' equity

2,000
13,661
15,661

GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

100
23,620162
23,882

4
6
N/A

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Disclosures & Market Discipline Report 2022

4. OWN FUNDS REQUIREMENTS
The Group as a Class 2 investment firm group shall at all times have own funds at least thehighest of the following:• Initial minimum requirement,• Fixed Overhead Requirements and• K-Factors Requirement.
4.1. Initial Capital Requirement
As per the Title III of the Law, the initial capital of a CIF which is authorised to provide any of
the investment services or perform any of the investment activities listed in points (3) and (6) ofPart I of Annex I to the Investment Services and Activities and Regulated Markets Law, shall be€750,000 while for a CIF which is authorised to provide any of the investment activities listed inpoints (1), (2), (4), (5) and (7) and which is not permitted to hold client money or securities
belonging to its clients, the initial capital shall be €75,000. For all other CIFs, the initial capitalshall be €150,000.
Therefore, since the CIF is authorised to provide the investment service of “dealing on own
account”, the Group’s initial capital is €750,000.
4.2. Fixed Overheads requirement
The fixed overheads requirement (FOR) applies to all CIFs. The FOR is intended to calculate aminimum amount of capital that a CIF would need available to absorb losses if it has cause towind-down or exit the market.
It is calculated as the one quarter of the fixed overheads of the preceding year (or business plan
where the audited financial statements are not available) in accordance with the provision of
Article 13 of IFR.
Further to the above, the solo and consolidated fixed overheads requirement based on the latest
solo and consolidated audited financial statements are €1,750k and €1,949k respectively as per
the table below:

GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

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Disclosures & Market Discipline Report 2022

Table 10: Fixed Overheads Requirement
Solo
€’000

Conso
€’000

17,585

18,398(10,585)(60)(10,604)(-)Employees', directors' and partners' shares in net profits(-)Other discretionary payments of profits and variable
remuneration(-)Shared commission and fees payable(-)Fees, brokerage and other charges paid to CCPs that are
charged to customers(-)Fees to tied agents(-)Interest paid to customers on client money where this is at
the firm's discretion(-)Non-recurring expenses from non-ordinary activities(7,360)(7,360)(-)Expenditures from taxes(3,164)(3,183)

(1)

(1)

7,000
1,750

7,794
1,949

Item
Total expenses of the previous year after distributionof profits
Total deductions(-)Staff bonuses and other remuneration(60)(-)Losses from trading on own account in financial instruments(-)Contract based profit and loss transfer agreements(-)Expenditure on raw materials(-)Payments into a fund for general banking risk(-)Expenses related to items that have already been deductedfrom own funds

Annual Fixed Overheads
Fixed Overheads requirement
4.3. K-Factors Requirement

The K-factor capital requirements are essentially a mixture of activity- and exposure-based
requirements. K-factors applies to an individual investment firm will depend on the MiFID
investment services and activities it undertakes.
Capital requirement from applying K-factors formula is the sum of Risk to Client (‘RtC’), Risk
to Market (‘RtM’) and Risk to Firm (‘RtF’).
Further to the above and since the CIF is Class 2 IF which is authorized to provide theinvestment service of Dealing on Own Account, all RtC, RtM and RtF proxies are applicable.
5.1.1. Risk to Client
The risk to Client proxy captures the risk that may be inflicted onto the clients. RtC exists in theactivities/services of the firm which are related to the client and are measured as a percentage ofClients Money Held (CMH), Assets Under Management (AUM), Assets Safeguarded &Administered (ASA) and Clients’ Orders Handled (COH).

GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

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Disclosures & Market Discipline Report 2022

The Group is required to calculate the following K-Factors requirements as part of the RtC:
K-AUM: Assets Under Management
K‐AUM captures the risk of harm to clients from an incorrect discretionary management of client
portfolios or poor execution and provides reassurance and client benefits in terms of thecontinuity of service of ongoing portfolio management and investment advice.
AUM is the value of assets an IF manages for its clients under both discretionary portfolio
management and non-discretionary arrangements constituting investment advice of an ongoingnature.
Calculation
AUM shall be the rolling average of the value of the total monthly assets under management,
measured on the last business day of each of the previous 15 months, excluding the 3 most recent
monthly values.
K-AUM shall be the arithmetic mean of the remaining 12 monthly values multiplied by therelevant coefficient of 0.02%.
Since the Company did not provide any portfolio management or investment advice services
during the year ending 31 December 2022, the Company was not subject to the risk relating tothis K-factor.
K-CMH: Clients Money Held
K‐CMH captures the risk of potential for harm where an investment firm holds the money of its
clients, taking into account whether they are on its own balance sheet or in third‐party accounts
and arrangements under applicable national law provided that client money is safeguarded in theevent of bankruptcy, insolvency, or entry into resolution or administration of the investment firm.
CMH is the amount of client money that an investment firm holds or controls. It excludes clientmoney that is deposited on a (custodian) bank account in the name of the client itself, where theinvestment firm has access to these client funds via a third-party mandate. (on segregated or
nonsegregated basis).
Calculation
CMH shall be the rolling average of the value of total daily client money held, measured at theend of each business day for the previous 9 months, excluding the 3 most recent months.
K-CMH shall be the arithmetic mean of the daily values from the remaining 6 months multipliedby the relevant coefficient (0.4% for segregated accounts and 0.5% for non- segregatedaccounts).
As at 31 December 2022, the K-CMH was €275k. The table below shows the average CMH
values in segregated accounts and non-segregated accounts for the 4th quarter of 2022 inaccordance with the Article 18(1) of IFR:

GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

26

Disclosures & Market Discipline Report 2022

Table 11: Total CMH (average amounts)
Factor amount
DecemberNovember
2022
2022
€’000
€’000

CMH - Segregated (average amounts)
CMH - Non-segregated (average amounts)

36,63725,73636,27924,651

October
2022€’000

35,194
24,124K-ASA: Assets Safeguarded and Administered
K‐ASA captures the risk of safeguarding and administering client assets, and ensures thatinvestment firms hold capital in proportion to such balances, regardless of whether they are on
its own balance sheet or in third‐party accounts.
ASA means the value of assets that an investment firm safeguards and administers for clients –ensures that investment firms hold capital in proportion to such balances, regardless of whether
they are on its own balance sheet or in third-party accounts.
Calculation
It is calculated as the rolling average of the daily total value of assets under safekeeping andadministration, measured at the end of each business day for the previous 9 months, excluding
the 3 most recent months.
K-ASA shall be the arithmetic mean of the daily values from the remaining 6 months multipliedby the relevant coefficient of 0.04%.
During the year under review, the Company was not subject to the risk relating to K-ASA since
it was safeguarding clients’ positions in CFD products. It is noted that the safeguarding of clients’positions in CFD products is captured under K-CMH in consideration of the nature of CFD
products.
K-COH: Client Orders Handled
K‐COH captures the potential risk to clients of an investment firm which executes orders (in thename of the client, and not in the name of the investment firm itself), for example as part of
execution‐only services to clients or when an investment firm is part of a chain for client orders.
COH captures the potential risk to clients of an investment firm which executes its orders (in thename of the client). This is the value of orders that an investment firm handles for clients, throughthe reception and transmission of client orders and execution of orders on behalf of clients.
Calculation
COH shall be the rolling average of the value of the total client orders handled, measured
throughout each business day for the previous 6 months.
K-COH shall be the arithmetic mean of the daily values of the remaining 3 months multiplied by
the relevant coefficient (0.1% for cash trades and 0.01% for derivative trades).

GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

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Disclosures & Market Discipline Report 2022

The Company executes its clients’ orders by acting as principal to their trades, therefore the riskreflected by this K-factor does not apply.
5.1.2. Risk to Market
The Risk to market proxy captures the risk an IF can pose to market access. The K-factor for
RtM is based on the rules for market risk, for position in financial instruments in foreignexchange and in commodities in accordance with the CRR.
K-NPR: Net Position Risk
A Class 2 investment firm must calculate its K-NPR requirement by reference to trading bookpositions and positions other than trading book positions where the positions give rise toforeign exchange risk or commodity risk. The K-NPR requirement is calculated in accordancewith Title IV of Part Three of the CRR.
The Group is exposed to market risk resulting from exposure to:▪
▪
▪
▪

FX Risk;Commodity Risk
Equity Risk
Traded Debt Instrument Risk

As at 31 December 2022, the K-NPR capital requirements for both solo and consolidated isamounted to €2,387k, as shown in the table below:
Table 12:K-NPR capital requirement
K-NPR

Solo
€'000

Conso
€'000

Foreign Exchange Risk

1,887

1,887

Commodities Risk

321

321

Position risk in equities

176

176

Position risk in traded debt instruments

3

3

2,387

2,387

K-NPR
Foreign Exchange Risk

The Group’s reporting currency is Euro. Foreign currency risk arises when future commercial
transactions and recognized assets and liabilities are denominated in a currency that is not theGroup's functional currency.
The foreign exchange risk in the Group is effectively managed by setting and controlling foreignexchange risk limits, such as through the establishment of a maximum value of exposure to aparticular currency pair as well as through the utilization of sensitivity analysis.

GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

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Disclosures & Market Discipline Report 2022

The Company’s foreign exchange risk capital requirement is €1,887k emanating from a net
foreign exchange exposure of €29,976k based on the latest relevant calculations of theCompany’s capital requirements, as at 31st of December 2022.
The Group continues to regularly monitor the impact of exchange rate risks and if deemednecessary corrective actions will be taken to minimize the effect.
Closely Correlated Currencies
Following the EBA’s Final draft Implementing Technical Standards on Closely Correlated
Currencies under Article 354 (3) of CRR, the Group may apply lower own funds requirements
against positions in relevant closely correlated currencies as these are disclosed by EBA. In thisrespect, for the calculation of the foreign exchange risk for matched positions on closely
correlated currencies, a capital requirement of 4% instead of 8% is used.
The Group’s matched positions in closely correlated currencies for the period up to 31 December
2022 were €12,775k. In this respect, please find below the analysis of the Group’s exposure to
Foreign Exchange Risk as at 31 December 2022:
Table 13: Foreign Exchange Risk capital requirementsLong

2% total Positions Subject to Capital
Charge
own
funds
Short
Long
Short Matched

CapitalReq.

53,74429,976

48,676

Net Positions
TOTAL
POSITIONS
Currencies closely
correlatedof which:
reporting currency
All other currencies
Gold

476

-

20,12912,775

1,887

15,703-

2,928

12,775511

35,902

-

-

-

5,068
-

14,19084-

17,11884

1,369
7FX risk analysis is the same for both solo and consolidated basis.
Commodities Risk
Commodities Risk is the risk of the unexpected changes in commodities prices. These
commodities are split into precious metals (except gold), base metals, agricultural products andother energy products (oil, gas).
The Company calculates its capital requirement with respect to commodities risk using the
Simplified Approach. Each position in commodities or commodity derivatives is expressed interms of the standard unit of measurement. The spot price in each commodity is expressed in thereporting currency. The capital requirements for each commodity are calculated as thesummation of the following:••

15% x net position (long or short) x spot price for the commodity
3% x gross position (long plus short) x spot price for the commodity

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29Disclosures & Market Discipline Report 2022

As at 31 December 2022, the Commodities risk capital requirements due to commodities risk
amounted to €321k.
Table 14: Capital requirements for Commodities risk
Gross Long Gross Short
Net Long
Category
€000
€000
€000
Precious
6
1,556
0
Metals
Other
1,359
1,396
595
Total

1,365

2,952

Net Short
€000

OFR
€000

1,550

279

632

42

2,182

321

595

Commodities risk analysis is the same for both solo and consolidated basis.
Position Risk
Position Risk is the risk involved with a certain trading position, commonly incurred due to thechanges in price of the debt and equity instruments. The Company calculates its capitalrequirements for position risk as the sum of the own funds requirements for the general andspecific risk of its positions in debt and equity instruments.
Equities
Equity Risk is the risk that the fair value of a financial instrument fluctuates as a result of changes
in market prices other than due to the effect of transactional foreign currency exposures or interest
rate risks.
The sum of the absolute values of all of the Company’s net long positions and all its net shortpositions is its overall gross position. The Company calculates, separately for each market, thedifference between the sum of the net long and the net short positions. The sum of the absolutevalues of those differences is its overall net position. The specific risk on this individual equity
can be ignored if the stock-index future in question is exchange traded and represents a relevant
appropriately diversified index.
The Company multiplies its overall gross position by 8% in order to calculate its own funds
requirement against specific risk. The own funds requirement against general risk are theCompany's overall net position multiplied by 8%.
As at 31 December 2022, the market risk capital requirements, due to position risk in equities
amounted to €176k.
Table 15: Position risks in equities

General Risk
Specific Risk
Total

Total Exposure
€000
1,734
461
2,195

Capital Requirements
€000
139
37
176

Equity risk analysis is the same for both solo and consolidated basis.
GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

30Disclosures & Market Discipline Report 2022

Traded Debt Instruments
Position Risks in Traded Debt Instruments arising from the investments on Fixed Income
instruments such as bonds. The position risk on a traded debt instrument shall be divided into
two components in order to calculate the capital required against it:a. Specific risk— this is the risk of a price change in the instrument concerned due to factors
related to its issuer; andb. General risk — this is the risk of a price change in the instrument due to a change in thelevel of interest rates.
Net positions shall be classified according to the currency in which they are denominated andshall calculate the capital requirement for general and specific risk in each individual currency
separately. The capital requirement for general market risk for traded debt instruments is
calculated under the maturity-based approach. The instruments’ net positions shall be grouped
into the three zones (maturity bands) according to the residual time to maturity and whether theircoupon is above/below 3%. The Company’s trading book exposure is presented in the tablebelow. As at 31 December 2022, the market risk capital requirements, due to position risk intraded debt instruments, amounted to €3k.
Table 16: Position Risks in Traded Debt Instruments for EUR currency
Net
Weighting Positions subject
Positionsfactorto capital charge
Currency: EUR
€000
%
€000
TDI in Trading Book
General Risk - Maturity based approach
40
3.75%
1
Zone 321
5.25%
1

Own Funds
Requirements
€000
3
3

TDI risk analysis is the same for both solo and consolidated basis.
In light of the above, the chart below shows the breakdown of the K-NPR capital requirement
as at 31 December 2022.

Breakdown of K-NPR
Commodity Risk
14%

Equity Risk
7%

FX Risk
79%

Figure 3: Breakdown of K-NPR

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31Disclosures & Market Discipline Report 2022

5.1.3. Risk to Firm
The Risk to Firm captures the risk that could be inflicted on the Company. The K-factors underRtF capture an investment firm’s exposure to their trading counterparties, the concentration riskin an investment firm's large exposures and the operational risk from an investment firm’s daily
trading flow.
K‐factors for K‐TCD and K‐CON under RtF constitute a simplified application of the rules laid
down in the CRR on counterparty credit risk and large exposure risk, respectively. The Group isrequired to calculate the following K-Factors requirements as part of the RtF:
K-TCD: Trading Counterparty Default
K-TCD captures the risk to an investment firm by counterparties to over‐the‐counter (OTC)
derivatives, repurchase transactions, securities and commodities lending or borrowing
transactions, long settlement transactions, margin lending transactions, or any other securities
financing transactions, as well as by recipients of loans granted by the investment firm on an
ancillary basis as part of an investment service that fails to fulfil their obligations, by multiplying
the value of the exposures, based on replacement cost and an add‐on for potential future exposure,accounting for the mitigating effects of effective netting and the exchange of collateral.
Calculation
Calculation based on CRR counterparty credit risk refers to exposure value, credit valuation,
replacement cost, potential future exposure and collateral. The following formulas describe thecalculation of the capital requirement for K-TCD:
K-TCD=a x EV x Rf x CVA
Where:- a=1.2- EV = Exposure value calculated in accordance Article 27 of IFR- RF = the risk factor applicable to the counterparty type as set out in the table 2 in Article
26- CVA = the credit valuation adjustment calculated in accordance with Article 32of IFR.
Trading Counterparty Default arises primarily as a result of the Company’s open CFD positions
maintained with clients. For the open positions with clients, the Company sets principles tomonitor and manage this risk on a real-time basis.
The K-TCD as at 31 December 2022 was calculated based on the provisions of Articles 25 to 32
of the IFR, as shown below:
Table 17: K-TCD Exposures
Positive
Type of
Fair
Value
contract€’000
Interest Rate
3

Notional
AmountPFE
Value

Collateral

ExposureAmount

K-TCD

€’000
61

€’000
0

€’000
5

€’000
1

€’000
0

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32

Disclosures & Market Discipline Report 2022

Foreignexchange
Equity single
nameEquity index
Commodity andemissionallowance
Other
Total

4,586

150,730

6,029

1,411

9,221

836

96

601

192

113

175

15

1,150

36,468

7,294

1,705

6,739

623

154

4,175

751

213

693

41

22
6,012

142
192,177

46
14,312

53
3,500

29
16,8592
1,517

The graph below shows the breakdown of K-TCD capital requirement per assets class:

K-TCD per Asset Class

Precious metal
1% Equity Crypto Commodities
0%
2%
1%

Indices
41%

Forex
53%

GOLD
2%

Figure 4: K-TCD Per Asset Class

K-CON: Concentration Risk on Large Exposures
K-CON captures concentration risk in relation to individual or highly connected private sector
counterparties with whom firms have exposures above 25 % of their own funds, or specificalternative thresholds in relation to credit institutions or other investment firms, by imposing acapital add‐on in line with CRR for excess exposures above those limits.
All IFs should monitor and control their concentration risk. However only Investment Firms
which are subject to a minimum own funds requirement under the K-Factors should report theconcentration risk.
Limits
Where the client is a credit institution or an investment firm, the limit to concentration will be
the higher of 25% of the investment firm's capital or €150m. If the amount of €150m is higher
than 25% of the firm's own funds, the limit to concentration should not exceed 100% of the firm’s
capital.
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33Disclosures & Market Discipline Report 2022

Where the client is not credit institution or investment firm, the limit to concentration risk remains
at 25% of the investment firm’s own funds.
Calculation
Where a firm exceeds these limits, it will be required to hold additional own fund requirement
based on the excess over the limit multiplied by a factor between 200% and 900%, depending on
the size of the excess as per Table 6 of Article 39 of IFR.
Further to the above, Own Funds requirement of the excess shall be calculated in accordancewith the following formula:
𝑂𝐹𝑅
𝑂𝐹𝑅𝐸 =∗ 𝐸𝑉𝐸
𝐸𝑉
Where:••••OFRE = own funds requirement for the excess;
OFR = own funds requirement of exposures to an individual client or groups of connectedclients, calculated by adding together the own funds requirements of the exposures to theindividual clients within the group, which shall be treated as a single exposure;
EV = exposure value calculated in TCD and NPR K-factors;
EVE = exposure value excess calculated as Exposure Value minus Limit

The K-CON own funds requirement shall be the aggregate amount of the own funds requirement
calculated for each client or group of connected clients.
The Company calculates and keeps aside an additional capital requirement for any amount thatexceeds the applicable K-CON limit. Additionally, the Company reports to CySEC, on aquarterly basis, via the Form 165-01, the amount of exposures exceeding the limits set in Article
37 of the IFR and the name of the relevant counterparty.
As at 31 December 2022, the Company’s exposures were within the limit and as such the KCON was zero.
K-DTF: Daily Trading Flow
K‐DTF captures the operational risks to an investment firm in large volumes of trades concluded
for its own account or for clients in its own name in one day which could result from inadequate
or failed internal processes, people and systems or from external events, based on the notional
value of daily trades, adjusted for the time to maturity of interest rate derivatives in order to limit
increases in own funds requirements, in particular for short‐term contracts where perceived
operational risks are lower. DTF means the daily value of transactions that an investment firm
enters through dealing on own account or the execution of orders on behalf of clients in its own
name, excluding the value of orders that an investment firm handles for clients which are alreadytaken into account in the scope of client orders handled.
Calculation
DTF shall be the rolling average of the value of the total daily trading flow, measured
throughout each business day for the previous 9 months, excluding 3 recent months.
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34Disclosures & Market Discipline Report 2022

DTF= sum of [ABS(Buys) + Abs (Sells)] for both cash trades and derivatives
K-DTF shall be the arithmetic mean of the daily values of the remaining 6 months multiplied by
the relevant coefficient (0.1% for cash trades and 0.01% for derivative trades). As at 31 December
2022, the K-DTF was €238k. The table below shows the arithmetic mean amount of DTF in cash
trades and derivatives for the 4th quarter of 2022, in accordance with the Article 20(1) of IFR:
Table 18: Total DTF (average amounts)
Factor amount
December November
October
2022
2022
2022
€’000
€’000
€’000

DTF - Cash trades (average amounts)
DTF - Derivative trades (average amounts)

2,375,654

2,467,748

2,977,077

5.1.4. K-Factors Requirement Results
As at 31 December 2022, the K-Factors Requirement was €4,417k shown in the table below:
Table 19: K-Factors Results
Consolidated

Solo
Item

FactorAmount
€’000

KFR
€’000

FactorAmount
€’000

KFR
€’000

TOTAL K-FACTORREQUIREMENT

4,417

4,417

Risk To clients
K-AUM
K-CMH (Segregated)
K-CMH (non-Segregated)
K-ASA
K-COH (Cash Trades)
K-COH (Derivative Trades)
Risk to Market
K-NPR
Risk to Firm
K-TCD
K-DTF (Cash Trades)
K-DTF (Derivative Trades)
K-CON

275
147
129
2,387
2,387
1,755
1,517
238
-

275
147
129
2,387
2,387
1,755
1,517
238
-

36,63725,736-2,375,654

36,63725,736-2,375,654

The below figure illustrates the breakdown of the K-Factors requirement.

GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

35Disclosures & Market Discipline Report 2022

K-FACTORS REQUIREMENT
K-DTF
6%

K-CMH
6% K-ASA
0%

K-TCD
34%
K-NPR
54%

Figure 5: K-Factors Requirement
4.4. Capital Ratios
According to the provision 9 of the IFR, Investment firms shall have own funds consisting of thesum of their Common Equity Tier 1 capital, Additional Tier 1 capital and Tier 2 capital, and shallmeet all the following conditions at all times:
𝑪𝒐𝒎𝒎𝒐𝒏 𝑬𝒒𝒖𝒊𝒕𝒚 𝑻𝒊𝒆𝒓 𝟏 𝑪𝒂𝒑𝒊𝒕𝒂𝒍≥ 𝟓𝟔%
𝑫
𝑪𝒐𝒎𝒎𝒐𝒏 𝑬𝒒𝒖𝒊𝒕𝒚 𝑻𝒊𝒆𝒓 𝟏 𝑪𝒂𝒑𝒊𝒕𝒂𝒍 + 𝑨𝒅𝒅𝒊𝒕𝒊𝒐𝒏𝒂𝒍 𝑻𝒊𝒆𝒓 𝟏 𝑪𝒂𝒑𝒊𝒕𝒂𝒍≥ 𝟕𝟓%
𝑫
𝑪𝒐𝒎𝒎𝒐𝒏 𝑬𝒒𝒖𝒊𝒕𝒚 𝑻𝒊𝒆𝒓 𝟏 𝑪𝒂𝒑𝒊𝒕𝒂𝒍 + 𝑨𝒅𝒅𝒊𝒕𝒊𝒐𝒏𝒂𝒍 𝑻𝒊𝒆𝒓 𝟏 𝑪𝒂𝒑𝒊𝒕𝒂𝒍 + 𝑻𝒊𝒆𝒓 𝟐 𝑪𝒂𝒑𝒊𝒕𝒂𝒍≥ 𝟏𝟎𝟎%
𝑫

where D is the own funds requirement calculated in accordance with Article 11.
The own funds, own funds requirement and capital ratio reported as at 31 December 2022, were
the following:
Table 20: Own Funds

Own Funds

Solo
€’000
15,568Conso€’000
23,789OWN FUNDS REQUIREMENTS
Initial Capital
Fixed Overheads Requirement
K-Factors Requirement
Own funds Requirement

€’000
750
1,750
4,417
4,417

€’000
750
1,949
4,417
4,417

€’000
352.49%352.49%352.49%11,151€’000
538.62%538.62%538.62%
19,372OWN FUNDS COMPOSITIONCAPITAL RATIOSCET 1 (min. 56%)
T1 (min. 75%)
Total (min. 100%)
Surplus of Total capital
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36Disclosures & Market Discipline Report 2022

As per the above results, the Group as at 31 December 2022 maintains adequate own funds tocover its capital requirements. However, the Group should monitor the above ratios in order toensure compliance with the capital adequacy requirements at all times
Further to the above, the Group has implemented a capital adequacy monthly monitoring
program in order to ensure compliance with the IFR requirements at all times. In this respect, theGroup calculates the capital requirement on a monthly basis in order to assess the capital
adequacy ratio for the respective month.
4.5. Reporting requirements
The Group as a Class 2 investment firm group is required by the Law to report on a quarterly
basis the following items:a) Level and composition of own fundsb) Own funds requirementsc) Own funds requirement calculationsd) Where the firm is a Class 3 firm – the level of activity, including the balance sheete) and revenue breakdown by investment service and applicable K-factorf) Concentration riskg) Liquidity requirements
The above information shall be reported to CySEC using the Form165-01 “Reporting for Class2” on a quarterly basis.
The Senior Management as well as the Risk Manager monitor these reporting requirements andhave policies and procedures in place to help meet the specific regulatory requirements. This isachieved through the preparation of accounts to monitor the financial and capital position of theGroup.
Moreover, the Company is required to submit immediately to CySEC the prudential Form 16501 under exceptional reporting, through the TRS, wheni. the own funds of the CIF have decreased below its own funds requirement,
ii. the CIF’s liquid assets are below its liquidity requirement, andiii. the CIF has exceeded the concentration risk limits, as defined in Articles 37(1) and37(3) of IFR.
During the year under review, the Group’s own funds never dropped below its own funds
requirement and the Group fulfilled its obligations by successfully submitting, on a quarterly
basis, the Capital Adequacy Reports.
4.6. Concentration risk requirements
The concentration risk arising from exposures to each counterparty, including central
counterparties, groups of connected counterparties, and counterparties in the same economic
sector, geographic region or from the same activity or commodity, the application of credit risk
mitigation techniques, and including in particular risks associated with large indirect credit
exposures such as a single collateral issuer, must be addressed and controlled including by meansof written policies and procedures.
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37Disclosures & Market Discipline Report 2022

Exposure means any asset or off-balance sheet item without applying the risk weights or degrees
of risk. Large Exposure means the exposures in the trading book/banking book of an investment
firm to a client or a group of connected clients, the value of which exceeds the limits set.
The CIFs that are categorized as Class 2 IFs should continue to monitor and control theirconcentration risk with regards to their trading book exposures to a client or a group of connectedclients in accordance with Part four of IFR.
In particular, CIFs shall monitor and control their concentration risk so as not to exceed thefollowing limits as per Article 37 of IFR.

Table 21: Large Exposure Limits
Type
Institution
Non-institution

Limit
Min {up to 100% of eligible capital,
Max (25% of eligible capital, €150m)}
25% of eligible capital

Where any trading book exposure exceeds the limits mentioned above, a CIF shall calculate an
additional capital requirement as part of the K-CON requirement.
According to Circular C513, the Company should notify CySEC without delay when the limits
referred to in article 37(3) of IFR are exceeded, as required by article 38 of IFR.
Moreover, harm can arise from more than just a concentrated trading book exposure to a client.
To mitigate the potential for harm that can arise from different types of concentrated exposuresor relationships, the Group should monitor and control all their sources of concentration risk,
including:• exposures in a trading book• assets (for example, trade debts) not recorded in a trading book• off-balance sheet items• the location of client money• the location of client assets• the location of its own cash deposits• the sources of its earnings
However, there are no limits on the banking book exposures of an Investment Firm.
The Group is reporting to CySEC on a quarterly basis the level of concentration risk with respect
to the credit institutions, investment firms and other entities where clients’ money are held andwhere client securities are deposited while it shall report the level of concentration risk withrespect to the credit institutions where its own cash is deposited as per Article 54(2) of IFR.
Moreover, the Group shall report the top five clients from whom the largest amounts of Group’s
earnings are derived, the top five, if available, largest trading book exposures and largest
exposures not recorded in the trading book.
Further to the above, the Company’s own corporate funds and clients’ funds during the year 2022
were well diversified, as per the provisions of Paragraph 6(2) of Directive DI87-01 and Circular
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38Disclosures & Market Discipline Report 2022

C418. The Company maintains proper accounting controls in order to identify, monitor andcontrol all exposures including clients’ balances and the value of the assets held as financial
instruments under pledge.
4.7. Liquidity Requirement
As a Class 2 investment firm, the Company is required to hold an amount of liquid assets
equivalent to at least one third of the fixed overheads requirement. The purpose is to ensure thatthe investment firms have an adequate stock of unencumbered high-quality liquid assets that canbe converted easily and immediately in private markets in cash to meet their liquidity needs fora 30-calendar day liquidity stress scenario. The IFR specifies the instruments that are eligible tobe qualified as liquid assets to be included in the calculation of the said ratio:• Coins and banknotes• Claims on ECB or other Central Banks• High Quality Covered Bonds• Shares or units in CIUs
In this respect and as per the Company’s latest audited financial statements, the Company has
the following liquid assets which is well above the 1/3 of the total fixed overheads requirement.
Table 22: Liquidity Requirements

Liquidity Requirement

Solo
€’000
583

Conso
€’000
650

Liquid Assets
Surplus21,03020,446

21,03020,380Item

Further to the above, the Group maintains adequate liquid assets to cover the one third fixed
overheads requirement. However, the Group should monitor the above in order to ensurecompliance at all times.

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39Disclosures & Market Discipline Report 2022

5. OTHER RISKS
5.1. Operational Risk
Operational risk means the risk of loss resulting from inadequate or failed internal processes,
people and systems or from external events. Operational risk includes legal risk but excludes
strategic and reputational risk.
The following list presents some event-type categories, included in operational risk, with someexamples for each category:Internal Fraud• misappropriation of assets;• tax evasion;• intentional mismarking of positions;• bribery.

External Fraud• theft of information;• hacking damage;• third-party theft;• forgery.

Employment Practices andWorkplace Safety• discrimination;• workers compensation;• employee health;• safety.

Clients, Products, &Business Practice• market manipulation;• antitrust;• improper trade.

Damage to physical assets• damage to physical assets from a natural disaster,e.g. earthquake

Business Disruption &Systems Failures• utility disruptions;• software failures;• hardware failures.

Execution, Delivery, &Process Management• data entry errors;• accounting errors;• failed mandatory reporting;• negligent loss of Client assets.
Figure 6: Operational Risk Registry

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40Disclosures & Market Discipline Report 2022

The Group manages operational risk through a control-based environment in which processes
are documented and transactions are reconciled and monitored. This is supported by continuous
monitoring of operational risk incidents to ensure that past failures are not repeated.
Furthermore, the Group has in place policies and processes whose implementation assists withthe evaluation and management of any exposures to operational risk.
The Group has implemented an operational risk management framework designed to ensure that
operational risks are assessed, mitigated and reported in a consistent manner consisting of, interalia, the following components:• Maintaining a four-eye structure and implementing board oversight over the strategic
decisions made by the heads of departments;• A IT Disaster Recovery Plan has been designed in order to be used in the event of a force
majeure affecting the Group’s internal systems and databases; and• Maintenance of Risk Registers in the Context of the ICAAP;• A Business Continuity Plan has been implemented which helps protect all of the Group’s
information databases including data, records and facilities.
• The majority of actions occurring in the Group’s systems are automated and therefore it
is less likely that a human error will occur;• Review of risks and controls as part of the Internal Audit function;• Regular review and updating of the Group’s policies;
5.2. Interest Rate Risk
Interest rate risk is the risk that the value of financial instruments (including currencies) willfluctuate due to changes in the market interest rates. The Group is exposed to interest rate risk inrelation to its bank deposits and from the interest charged on the derivative financial instrumentsthat remain open overnight.
The Group monitors interest rate fluctuations and based on the fluctuations of the relevant rates,
the necessary hedging activities will be undertaken, as and where applicable.
5.3. Reputation Risk
Reputation risk is the current or prospective risk to earnings and capital arising from an adverse
perception of the image of the Group on the part of customers, counterparties, shareholders,investors or regulators. Reputation risk could be triggered by poor performance, the loss of one
or more of the Group’s key directors, the loss of large customers, poor customer service, fraud
or theft, customer claims, legal action and regulatory fines.
The Group has transparent policies and procedures in place when dealing with possible customer
complaints in order to provide the best possible assistance and service under such circumstances.
The possibility of having to deal with customer claims is very low as the Group provides highquality services to customers.
5.4. Strategic Risk
Strategic Risk could occur as a result of adverse business decisions, improper implementation ofdecisions or lack of responsiveness to changes in the business environment. The Group’s
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41Disclosures & Market Discipline Report 2022

exposure to strategic risk is moderate as policies and procedures to minimize this type of risk are
implemented in the overall strategy of the Group.
5.5. Business Risk
Business Risk includes the current or prospective risk to earnings and capital arising fromchanges in the business environment including the effects of deterioration in economic
conditions. Research on economic and market forecasts are conducted with a view to minimize
the Group’s exposure to business risk. These are analyzed and taken into consideration when
implementing the Group’s strategy.
5.6. Regulatory Risk
Regulatory risk is the risk the Group faces by not complying with relevant Laws and Directives
issued by its supervisory body. If materialized, regulatory risk could trigger the effects ofreputation and strategic risk. The Group has documented procedures and policies based on therequirements of relevant Laws and Directives issued by the Commission; these can be found in
the Procedures Manual. Compliance with these procedures and policies are further assessed andreviewed by the Internal Auditors and suggestions for improvement are implemented bymanagement. The Internal Auditors evaluate and test the effectiveness of the Group’s control
framework at least annually. Therefore, the risk of non-compliance is very low.
5.7. Legal and Compliance Risk
Legal & Compliance risks arise from violations of, or non-conformance with, the Law, Directives
and Circulars issued thereof, regulations, prescribed practices, internal policies, and procedures,or ethical standards. This risk exposes the Group mainly to financial losses due to imposed finesfrom the Regulators. Compliance incidents may also lead to diminished reputation, reducedGroup value, limited business opportunities, reduced expansion potential, and possible inability
to enforce contracts.
The probability of such risks occurring is relatively low due to the detailed internal proceduresand policies implemented by the Group and regular reviews by the Internal Auditors. The
structure of the Group is such to promote clear coordination of duties and the management
consists of individuals of suitable professional experience, ethos and integrity, who haveaccepted responsibility for setting and achieving the Group’s strategic targets and goals. In
addition, the Board meets at least annually to discuss such issues and any suggestions to enhancecompliance are implemented by management.
5.8. IT Risk
IT risk could occur as a result of inadequate information technology and processing or arise froman inadequate IT strategy and policy or an inadequate use of the Group’s information technology.
Specifically, policies have been implemented regarding back-up procedures, software
maintenance, hardware maintenance, use of the internet and anti-virus procedures.
Materialization of this risk has been minimized to the lowest possible level.
5.9. Conduct Risk
Conduct risk is defined as the risk of an action, by an individual, financial institution or theindustry as a whole, which leads to customer detriment or undermines market integrity. This can
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42Disclosures & Market Discipline Report 2022

bring sanctions and negative publicity. Moreover, EBA has defined conduct risk as the current
or prospective risk of losses to an institution arising from inappropriate supply of financial
services including cases of wilful or negligent misconduct. Consequently, conduct risk arises
from failures of designated liquidity providers located in third countries associated with theGroup.
Additionally, the Group is exposed to negative balances with its Liquidity Providers, in case of
fast-pacing volatile market, where the LP cannot close a position at the Group’s stop out limit.
Therefore, the Group may be exposed to conduct risk arising from inadequate agreements with
the Liquidity Providers and/or with the third parties that hold client’s funds.
As part of the risk management policy and tools, the Group has procedures in place to diversify
its liquidity providers and monitors their financial position on an on-going basis. The financial
soundness of the liquidity providers is closely monitored and the Group is ready to switch toalternative LPs, if necessary. Furthermore, the receivable/payable amounts with the LPs aremonitored on a daily basis. In particular, the Group examines its existing procedures andarrangements with respect to the products offered and services provided.

GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

43Disclosures & Market Discipline Report 2022

6. INTERNAL CAPITAL ADEQUACY AND RISK ASSESSMENT PROCESSThe purpose of capital is to provide sufficient resources to absorb unexpected losses over andabove the ones that are expected in the normal course of business. The Company aims to maintaina minimum risk asset ratio which will ensure there is sufficient capital to support the Company
during stressed conditions.
Pursuant to Chapter 2 and Paragraph 18 of the Law, the Company should establish sound,
effective and comprehensive arrangements, strategies and processes to assess and maintain on an
ongoing basis the amounts, types and distribution of internal capital and liquid assets that they
consider adequate to cover the nature and level of risks which they may pose to others and towhich the investment firms themselves are or might be exposed. These arrangements, strategies
and processes shall be appropriate and proportionate to the nature, scale and complexity of theactivities of the Company and they shall be subject to regular internal review.
In light of the above, the ICARA report will present the main business background aspects anddevelopments of the Company, a summary of the Company’s business economic environment,
the Company’s financial summary for the previous and upcoming years, the business andstrategic goals, organisational structure and the risk management framework, the overall
assessment of the material risks as well as a forward-looking capital and liquidity planning.
The Company recognises the importance of the ICARA and appreciates that it enables the firm
to justify its business strategy and risk assessments in such a way to be more diligent in the
inclusion of risk factors in the business design process and also to hold less capital than the grossrisks to which it is exposed. It is also acknowledged that the ICARA Report is a reasonably
intense process, requiring information from many different departments and committees of thecompany and also it requires senior management time at the design phase, during the risk andfinancial data collection phase and for the sign-off phase. Therefore, the Board is committed tocontinuously update the ICARA at least annually to reflect the latest strategic plans and updates.
During the year 2022, the Company replaced its existing ICAAP with the new ICARA byestablishing new assessments with respect to the liquidity adequacy of the Company, designing
new financial projections and stress tests to reflect the K-Factors requirement and drafting a newreport which reflects all provisions under the new regulation. The methodologies of K-Factors
and Liquidity Stress tests incorporated into the ICARA process, as well as the updated risk
register which focus on a harm-pose approach identifying different potential risk events that may
affect the Company’s overall capital adequacy position.
The ICARA Report and capital planning for the year 2021 has been prepared and approved by
the Board in the third quarter of 2022. The report is being reviewed and updated annually, while
it is submitted to CySEC upon its request as laid down at Article 50(b) of the IFR.

GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

44Disclosures & Market Discipline Report 2022

7. REMUNERATION POLICYThe Group have established remuneration policy that aims to set out the remuneration practices
taking into consideration the salaries and benefits of the staff, in accordance with the provisionsof Directive as well as the Circular 031 on remuneration policies and practices, where thesecomply with specific principles in a way and to the extent that is appropriate to the Group’ssize, internal organization and the nature, scope and Group’s remuneration strategy is designed
to reward and motivate the people who are committed to maintaining a long term career with
the Group and performing their role in the interests of the Group.
The design of the Policy is approved by the people who effectively direct the business, after
taking advice from the compliance function, and implemented by appropriate functions topromote effective corporate governance. The people who effectively direct the business are
responsible for the implementation of remuneration policies and practices and for preventing anddealing with any relevant risks, that remuneration policies and practices can create. The Board
discusses remuneration policy matters at least annually.
Furthermore, the Policy also benefits from the full support of senior management or, whereappropriate, the supervisory function, so that necessary steps can be taken to ensure that relevant
persons effectively comply with the conflicts of interest and conduct of business policies andprocedures. Moreover, the Policy adopts and maintains measures enabling them to effectively
identify where the relevant person fails to act in the best interest of the client and to take remedialaction.
Remuneration Committee
It is noted that the Company has considered its size, internal organisation and the nature, scopeand complexity of its activities and it does not deem as necessary the establishment of a specificremuneration committee. Remuneration practices are currently set by the Senior Management, in
its supervisory capacity. In case the Company shall deem necessary to establish a Remuneration
Committee in the future, then this section shall be updated as applicable.
Remuneration System
The remuneration system and policy is concerned with practices for those categories of staff
whose professional activities have a material impact on its risk profile, i.e. the Senior
Management and members of the Board; the said practices are established to ensure that the
rewards for the “executive management” are linked to the Group’s performance, to provide an
incentive to achieve the key business aims and deliver an appropriate link between reward andperformance whilst ensuring base salary levels are not set at artificially low levels. The
remuneration is a significant method of attracting and retaining key employees whose talent cancontribute to the short and long term success of the business.
The remuneration system takes into account the highly competitive sector in which the Group
operates, and the considerable amount of resources the Group invests in each member of the staff.
The remuneration includes all forms of benefits provided by the Group to its staff and can be
Financial or non-Financial remuneration.
The total remuneration of staff currently consists of a fixed and a variable component.
GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

45Disclosures & Market Discipline Report 2022

Fixed Remuneration
The fixed remuneration varies for different positions/roles depending on each position’s actual
functional requirements, and it is set at levels which reflect the educational level, experience,accountability, and responsibility needed for a staff member to perform each position/role. The
remuneration is also set in comparison with standard market practices employed by the othermarket participants/ competitors.
The fixed remuneration includes salary, fixed pay allowance and other cash allowances and all
are determined based on the role and position of each employee, taking into account theexperience, seniority, education, responsibility, and market conditions.
Furthermore, the employee’s personal goals and performance evaluation in relation to theobjectives set up at the beginning of the period and the employee’s professional conduct withclients are taken into account in order to determine the remuneration.
The fixed remuneration is approved by the Board of Directors for all the relevant employees andit is reviewed by the Group at such intervals, as it shall decide at its sole discretion, without
affecting the other terms of employment
Variable Remuneration
The variable remuneration is a performance-based remuneration which motivates, and rewards
staff members based on their results in relation with the targets set at the beginning of the year.
This kind of remuneration is not guaranteed, and the BoD has determined a maximum percentage
of variable remuneration relative to the fixed remuneration in order to ensure a compliant ratio
between these two kinds of remuneration.
Furthermore, no remuneration is payable under deferral arrangements (with vested or unvested
portions). Finally, the Group did not pay any non-cash remuneration for the year under review,
since the Group does not have any non-cash instruments, such as shares or other equivalent noncash instruments, in place.
The Group recognizes that its remuneration system has some features that increase the misselling risk. Therefore, the Group applies effective mitigation controls for each part of the
remuneration system.
Other Factors
Where a variable remuneration is offered, the Group will ensure that the total remuneration
remains in competitive levels and that the employees are rewarded based on their performance
whilst remaining aligned with the department’s and/or the Group’s performance.
Other factors taken into account are the following:i. the financial viability of the Group;ii. the general financial situation of the state in which the Group operates;iii. the Employee’s personal objectives (such as personal development), compliance withregulatory requirements (including the “best execution policy” and other protective
GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

46

Disclosures & Market Discipline Report 2022

policies and procedures aiming towards the best interest of the Client), systems andcontrols, commitment and work ethic.
Performance Appraisal
The Group through its Senior Management and Departmental Heads shall implement a
performance appraisal method, which is based on a set of both measurable quantitative indicatorsand qualitative indicators, developed for each business unit.
The appraisal is being performed as follows:i.
Quantitative and qualitative objectives are set in the beginning of each month, quarter
and/or year (each department is being appraised on different periods) defining what theGroup functions, departments and individuals are expected to achieve over an upcoming
period of time;ii.
Performance checks and feedbacks: managers provide support and feedback to theconcerned personnel during the time periods decided, during the daily activities or duringformal or informal performance reviews; the aim is to assist the respective employees todevelop their skills and competencies.
Risk takers and control functions
The remuneration of material risk takers and Employees in control functions is subject tostricter conditions. Once a year, the Board of Directors identifies Employees who may takematerial risks on behalf of the Group as required within the EBA’s guidelines on effective
remuneration practices:
i. Employees dealing in and approving financial instruments;
ii. Employees who monitor compliance with risk taking limits;iii. Management body and Senior Management members
iv. Staff who have Managerial responsibility for material business units, control and otherfunctions for managing or mitigating material risks in areas impacting the Group’s KFactors
v. Individual’s whose total remuneration exceeds €500k and/or is greater than the average
remuneration of members of the management body and senior management
vi. Where a Group employs over 1000 staff members, the individual which is within the
0.3% of staff awarded the highest total remunerationvii. Other employees with a material impact on the Group’s risk profile are also subject to thestricter remuneration conditions
Employees in control functions, including Compliance, Finance and Risk Management are
eligible for performance-based pay, however such pay must be approved by the Board of
Directors on a case to case basis and must be related to achievement related to the function of therelevant employee.
Further to the above, the Policy is designed to manage the conflicts of interest which might ifother business areas had undue influence over the remuneration of employees within Control
Functions. Moreover, the need to avoid undue influence is particularly important where
employees from the Control Functions are embedded in other business areas.

GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

47

Disclosures & Market Discipline Report 2022

Remuneration of Senior Management Personnel and Directors
The remuneration policy of the Group is intended to ensure that the Group will attract and retain
the most qualified Senior Management Personnel and Directors. The remuneration of the
Executive Board consists of a fixed pay and/or bonus entitlement. Members of the Executive
Board may also be entitled to Group paid car and/or phone and other benefits.
The table below provides information on the remuneration of Executive Directors, Senior
Management and other staff whose activities have a material impact on the risk profile of theGroup, broken down by fixed and variable remuneration.
Table 23: Remuneration split of staff whose activities have a material impact on the risk
profile of the Group.
Annual Remuneration as at 31 December 2022
No. ofFixed
Variable
Aggregated
Position
Beneficiaries
Remuneration
Remuneration
Remuneration€€€
Executive
2
207,628
369,655
577,283
Directors
SeniorManagement
10
438,658
28,232466,890(excl. directors)
Non-Executive
2
12,34812,348
Directors
Total

14

658,633

397,888

1,056,521

The variable to fixed remuneration ratio as at 31 December 2022 was 62%.
The Article 32 of the IFD sets, among others, the conditions on variable remuneration paid to
employees:• at least 50% of the variable remuneration shall consist of shares/ share-linked instruments/
equivalent non-cash instruments that adequately reflect the credit quality of the IF as agoing concern, or non-cash instruments which reflect the instruments of the portfolios
managed;• at least 40% of the variable remuneration is deferred over the three-to-five-year period.
These points don’t apply to the Group since the Company does not fall under the definition of‘significant CIF’ (off-balance sheet assets is on average less than €100m over the preceding
four-year period).
Moreover, Investment Firms are required to disclose the number of natural persons that are
remunerated €1mln or more per financial year, in pay brackets of €1mln, including their job
responsibilities, the business area involved and the main elements of salary, bonus, long-termaward and pension contribution. Nevertheless, currently there are no natural persons at theGroup that are remunerated €1mln or more per financial year and as such the above disclosure
is not applicable to the Group.

GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

48

Disclosures & Market Discipline Report 2022

During the year there were no deferred remuneration, sign-on or severance payments.
The aggregate remuneration of the Group’s personnel for the year ended 31st December 2022,
broken down by business area, is presented in the following table:
Table 24: Remuneration split by business area
Annual Remuneration as at 31 December 2022
Fixed
Variable
Total
Business Area€€€
Control functions*
358,811379,655
738,466
Brokerage Department
84,071
5,429
89,500Back Office Department
48,5463,700
52,246
Dealing on Own Account
39,794
2,603
42,397
Department
Marketing Department
72,4683,000
75,468IT Department
42,5963,500
46,096
Total
646,285
397,888
1,044,173*Control functions include the Executive Directors, Compliance Officer and Money
Laundering Compliance Officer

GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

49

Disclosures & Market Discipline Report 2022

8. INVESTMENT POLICY
Investment Firms should disclose the following information in accordance with Article 46 ofIFR:a) the proportion of voting rights attached to the shares held directly or indirectly by theinvestment firm, broken down by Member State and sector;b) a complete description of voting behaviour in the general meetings of companies theshares of which are held in accordance with paragraph 2 of Article 46, an explanation of
the votes, and the ratio of proposals put forward by the administrative or management
body of the company which the investment firm has approved; andc) an explanation of the use of proxy advisor firms;d) the voting guidelines regarding the companies the shares of which are held inaccordance with paragraph 2 of Article 46.
CIFs who meet the criteria of Paragraph 26(8)(a) of the Law, whose on-and-off balance sheet
assets on average over the 4 year period are less than €100m are exempted from the disclosure
requirement regarding investment policy.
The Company does not meet the condition of Paragraph 26(8)(a) of the Law and as such theGoup is not required to disclose the requirements regarding investment policy.

GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

50Disclosures & Market Discipline Report 2022

9. ENVIRONMENTAL, SOCIAL AND GOVERNANCE RISKS
From 26 December 2022, investment firms which do not meet the criteria referred to Paragraph26(8)(a) of the Law shall disclose information on environmental, social and governance risks,
including physical risks and transition risks as per Article 35 of IFD.
The Company does not meet the condition of Paragraph 26(8)(a) of the Law and as such theGroup is exempted from disclosures regarding ESG.

GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

51Disclosures & Market Discipline Report 2022

10. APPENDIX – SPECIFIC REFERENCES TO THE IFR
IFRHigh Level Summary
Reference
Scope of disclosure requirements
Requirement to publish market disclosures, on the date of46 (1)
publication of the annual financial statements.
Requirement to publish market disclosures for small and non46 (2)interconnected IFs
Requirement to publish market disclosures for IFs which do not
46 (3)
longer meet the criteria of small and non-interconnected IF
Market disclosures to be published in an appropriate medium, or
46 (4)
provide clear cross-references to other media.
Risk management objectives and policies
Disclosure of the risk management objectives and policies foreach separate category of risk set out in Parts Three, Four andFive of the IFR, including a summary of the strategies andprocesses to manage those risks and a concise
47
risk statement approved by the investment firm’s management
body succinctly describing the investment firm’s overall risk
profile associated with thebusiness strategy
Governance
Disclosure of the number of directorships held by members of
48 (a)
the management body
The policy on diversity with regard to the selection of membersof the management body, its objectives and any relevant targets
48 (b)
set out in that policy, and the extent to which those objectives
and targets have been achieved
whether or not the investment firm has set up a separate risk
48 (c)
committee and the number of times the risk committee has met
annually
Own Funds
Full reconciliation of Common Equity Tier 1 items, Additional
Tier 1 items, Tier 2 items and applicable filters and deductions
49 (1) (a)applied to own funds of the investment firm and the balance
sheet in the audited financial statements of the IF;
Description of the main features of the Common Equity Tier 1
49 (1) (b)and Additional Tier 1 instruments and Tier 2 instruments issued
by the IF
Description of all restrictions applied to the calculation of own
49 (1) (c)funds in accordance with the IFR and the instruments anddeductions to which those restrictions apply
EBA shall develop implementation standards for points (a), (b),49 (2)(c) above.
Own Funds Requirements
GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

Section

1.3
N/A
N/A
1.4

1.5, 4, 5

2.4

2.3, 2.5

2.2

3.3

3.2

3.1
N/A

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Disclosures & Market Discipline Report 2022

50 (a)
50 (b)
50 (c)
50 (d)

Summary of IF’s approach to assessing adequacy of its internal
capital to support current and future activities.
Result of ICAAP upon request of the competent authority.
K-factor requirements calculated in aggregate form for RtM,
RtF, and RtC, based on the sum of the applicable K‐factors
Fixed overheads requirement

Remuneration policy and practices
Remuneration policy, including aspects related to gender
neutrality and the gender pay gap, for those categories of staff
51
whose professional activities have a material impact on the risk
profileDesign characteristics of the remuneration system, including thelevel of variable remuneration and criteria for awarding variable
51 (a)
remuneration, payout in instruments policy, deferral policy andvesting criteria
51 (b)
Ratios between fixed and variable remuneration
Aggregated quantitative information on remuneration, broken
51 (c)
down by senior management and members of staff whose actions
have a material impact on the risk profile of the investment firm
The amounts of remuneration awarded in the financial year, split
51 (c)(i)
into fixed and variable remuneration, and the number ofbeneficiaries
51 (c)(ii)
The amounts and forms of awarded variable remuneration
The amounts of deferred remuneration awarded for previous
51 (c)(iii)
performance periods
The amount of deferred remuneration due to vest in the financial
51 (c)(iv)
year
The guaranteed variable remuneration awards during the51 (c)(v)
financial year and the number of beneficiaries of those awards
The severance payments awarded in previous periods, that have
51 (c)(vi)been paid out during the financial year
The amounts of severance payments awarded during thefinancial year, split into paid upfront and deferred, the number of
51 (c)(vii)
beneficiaries of those payments and the highest payment that has
been awarded to a single person
Whether the IF benefits from a derogation laid down in Article
51 (d)
32(4) of the IFD
Investment policy
Not applicable due to criteria referred to in point (a) of Article 3252(4) of the IFD
Environmental, social and governance risks
Not applicable due to criteria referred to in point (a) of Article 3253(4) of the IFD

GBE Holding GmbH parent entity of GBE brokers Ltd authorized and regulatedby the CySEC with CIF license number 240/14.

4.4
6
4.3
4.2

7

7
7
7

7
7
N/A
N/A
N/A
N/A

N/A

7

8

9

53