For professional use only ABOUT US CONTACT US Home INVESTMENT SOLUTIONS FUNDS PRICES & PERFORMANCE LITERATURE NEWS & VIEWS MEDIA CENTRE PILLAR 3 DISCLOSURE INTRODUCTION The 2006 Capital Requirements Directive (CRD) created a revised regulatory capital framework across Europe governing the amount and nature of capital credit institutions and investment firms must maintain. In the United Kingdom, the Directive has been implemented by the Financial Conduct Authority (FCA) and the framework consists of three ‘Pillars’: Pillar 1: sets out the minimum capital requirements that firms need to maintain; Pillar 2: requires the firm to assess whether its Pillar 1 capital is adequate to meet its risks and is subject to annual review by the FCA; and Pillar 3: requires disclosure of specified information about the underlying risk management controls and capital position. The rules in the FCA Prudential Sourcebook for Banks, Building Societies and Investment Firms (BIPRU) set out the provisions for the Pillar 3 disclosure. This document is designed to meet our Pillar 3 obligations. FREQUENCY OF DISCLOSURE Canada Life Asset Management Limited (CLAM) will be making Pillar 3 disclosures annually. These disclosures are based on the Company’s position as at 31 December each year. The Board of Directors feel that disclosure on an annual basis is appropriate based on the firms current risk exposures and will review the need to disclose more frequently as part of its internal review process. LOCATION AND VERIFICATION The disclosure will be published on our website www.canadalifeinvestments.com. The information contained in this disclosure is not subject to external audit. BACKGROUND TO FIRM CLAM is authorised and regulated by the FCA as an Investment Management Firm. The firm’s activities give it the BIPRU categorisation of a “Limited Licence” and a “BIPRU €50k” firm. CLAM is the appointed investment manager of a number of collective funds and manages portfolios on behalf of other companies in the Great-West group. RISK MANAGEMENT OBJECTIVES AND POLICES CLAM is governed by a board of directors. The Board is comprised of directors who have the necessary skill and experience to lead and control the Company. The Board is responsible for setting the risk policy and risk appetite in line with group overall risk management framework and relevant guidelines. There is a Board Risk Committee which covers all regulated companies in the group and has responsibility for monitoring risk and reporting to the board. CREDIT RISK CLAM is exposed to credit risk through its receivables from clients and exposure to banks and money market funds where reserves are placed on deposit. Strong internal controls exist to ensure clients pay within the agreed credit terms and funds are placed with financial institutions that meet the required external credit ratings as determined by the Board. LIQUIDITY RISK CLAM consistently maintains sufficient liquid resources to meet its obligations from financial liabilities. Cash flow and capital adequacy forecasts are carried out on a regular basis. Surplus cash is placed on short term deposits to ensure liquidity. OPERATIONAL RISK These are risks resulting from inadequate or failed internal processes, people and technology or from external factors such as suppliers or changes in regulations or law which may adversely affect the Company. The Board, as part of its internal control and corporate governance procedures, regularly review these risks and their impact. STRATEGIC RISK CLAM operates in a competitive industry, downturns in the economy and capital markets can lead to a reduction in assets under management and management fees. As part of the strategic planning process the Board will assess the impact of various economic scenarios on the performance of the Company. EXPENSE RISK CLAM is constantly developing which gives rise to expense risk. Expenses have therefore been stressed in respect of any unanticipated expenditure requirements and increases in the cost of expected expenses. CLAM does not employ any staff but utilises staff from the Canada Life Group (CLFIS Limited). Pensions are provided at the group level and charged out along with other staff costs. On a look through basis CLAM would be responsible for its portion of the pension scheme risk. CAPITAL RESOURCES As at the 31st December 2013 the capital position of the CLAM in relation to its regulatory requirement is as follows: PILLAR 1 CAPITAL REQUIREMENT IS THE GREATER OF 2013 base capital requirement of €50,000 or £42,000 the sum of the market risk and the credit risk or £418,000 the fixed overhead requirement £1,589,000 Pillar 1 capital requirement (fixed overhead requirement) £1,589,000 Pillar 2 capital requirement £4,084,000 Capital requirement under the CRD highest of Pillar 1 and 2 £4,084,000 Capital Resources Share Capital £2,250,000 Audited Reserves £5,597,000 Tier 1 Capital £7,847,000 Tier 2 Capital Nil Total Capital resources under the CRD £7,847,000 Surplus / ( Deficit ) Capital £3,763,000 Remuneration disclosure year ending 31 Dec 2013 View PDF ABOUT US OUR PEOPLE OUR HISTORY ABOUT GREAT-WEST LIFECO INC AWARDS TREATING CUSTOMERS FAIRLY UK STEWARDSHIP CODE PILLAR 3 DISCLOSURE FAQS CONTACT US SHARE THIS PAGE INVESTMENT WITH VISION © 2014 Canada Life Investments ABOUT US Our People Our history About Great-West Lifeco Inc Awards Treating customers fairly UK Stewardship Code Pillar 3 disclosure FAQs Contact us INVESTMENT SOLUTIONS Fixed Income International Equities UK Equities Specialist Equities Multi Asset Risk Profiled Property Fund Management Real Estate Finance FUNDS Fixed Income International Equities UK Equities Specialist Equities Multi Asset Risk Profiled Life & Pension Buy our funds PRICES & PERFORMANCE LITERATURE NEWS & VIEWS Latest News Market Views MEDIA CENTRE Press releases Press Office CONTACT US Buy our funds How to find us Canada Life (Onshore) Canada Life International (Offshore Isle of Man) Canada Life International Assurance (Offshore Dublin) Press Office Feedback Data Protection Accessibility Legal Cookies © 2014 Canada Life Investments. All rights reserved. The Canada Life Investments website is intended for institutional investors, professional investors and professional advisers only and is not approved for use by private investors. Canada Life Investments is the brand for investment management activities undertaken by Canada Life Asset Management Limited, Canada Life Limited and Canada Life European Real Estate Limited. Canada Life Asset Management Limited (no. 03846821), Canada Life Limited (no.00973271) and Canada Life European Real Estate Limited (no. 03846823) are all registered in England and the registered office for all three entities is Canada Life Place, Potters Bar, Hertfordshire EN6 5BA. Canada Life Asset Management is authorised and regulated by the Financial Conduct Authority. Canada Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.