Given the impact of these issues and the importance we attach to their remediation, we expect you to carry out a systematic review of your equity finance business and its risk management practices and controls benchmarked against our findings set out in the annex below. While the observations set out in this letter are directly relevant to equity finance businesses and have been brought to light by the default of Archegos, we expect you to consider the highlighted themes more broadly across your sales and trading businesses, including but not limited to other forms of secured and synthetic financing activities, and to reference such work in your response. For the avoidance of doubt, your review should cover all major prime brokerage activity, including, to the extent that you provide them, fixed income and derivative prime brokerage services. You should also address our broader observations on risk culture in your reply.
You should report your findings to the PRA and the FCA together with detailed plans for remediation where relevant, by end of Q1, 2022. To ensure that any necessary improvements identified are made in a timely fashion, we expect you to consider reflecting progress when setting the variable remuneration of relevant senior executives. The PRA and FCA expect firms to designate one or more Senior Managers (where applicable) to be responsible for providing a response to this letter including a remediation plan, to the extent relevant. If you have any questions, or would like to discuss the scope of your internal assessment work further, please do not hesitate to get in touch with your supervision team.