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Pillar 3 Disclosure

1 Introduction

Firms are required under the Senior Management Arrangements, Systems and Controls (SYSC) manual of the Financial Conduct Authority Handbook to have in place robust governance arrangements and effective procedures which allow it to identify, manage, monitor and report the risks it is or might be exposed to.

Global Market Index Limited is authorised and regulated by the Financial Conduct Authority and this document sets out how the Firm complies with its obligations to identify, manage and mitigate risks.

2 Overview

The Capital Requirements Directive (‘CRD’) of the European Union created a regulatory capital framework across Europe governing how much capital financial services firms must retain. The rules are set out in the CRD under three pillars:

  • Pillar 1 sets out the minimum capital resource requirement firms are required to maintain to meet credit, market and operational risks
  • Pillar 2 requires firms to assess firm-specific risks not covered by Pillar 1 and, where necessary, maintain additional capital
  • Pillar 3 requires firms to disclose information regarding their risk assessment process and capital resources with the aim to encourage market discipline by allowing market participants to assess key information on risk exposure and the risk assessment process.

2.1 Frequency and location of disclosure

Future disclosures will be issued on an annual basis once they have been reviewed and approved by the Board. The disclosures are not subject to audit except where they are equivalent to those prepared under accounting requirements for inclusion in the financial statements.

The report and all future ones will be published on our Firm’s website.

2.2 Scope of disclosure

Global Market Index Limited (GMIUK) is an Financial Conduct Authority “FCA” authorised execution only broker for elective professional clients and eligible counterparties.

3 Governance Arrangements

3.1 The Management Body

The Board responsible for the Firm’s risk management governance structure and how the Firm’s risk exposure must be managed in line with the Firm’s overall business objectives and within its stated risk appetite. This includes the governance of the process for identifying, evaluating, managing and reporting the significant risks faced by the Firm.

The Board ultimately responsible for ensuring that the Firm maintains sufficient capital and liquidity resources to meet its regulatory capital and liquidity requirements and to support its growth and strategic objectives. Risk management is embedded throughout the business, with the overall risk appetite and risk management strategy approved by the Board propagated down throughout the business as appropriate.

The Governance Arrangements of the management body of Global Market Index Limited is illustrated below:

Board of Directors

Ashraf Ebid
Che-Hui “Jeff” Chao
Non-Executive Director
John Dean Taylor
Non-Executive Director
Zaid Alkhatib
COO – Director 
SMF3 & SMF16 & SMF17

The Firm has reviewed the number of directorships held by members of the Board/The Director has assessed the number of directorships held and are satisfied that the arrangements are such that the management body is able to commit sufficient time and resources to perform their obligations in the Firm. The number of directorships held is monitored on an ongoing basis.

4 Capital Adequacy, ICAAP and ICARA

The Firm’s overall approach to assessing the adequacy of its internal capital is documented in the Internal Capital Adequacy Assessment Process (“ICAAP”) and (“ICARA”).

The ICAAP and ICARA process includes an assessment of all material risks faced by the Firm and the controls in place to Identify, manage and mitigate these risks. The risks identified are stress-tested against various scenarios to determine the level of capital that needs to be held.

Where risks can be mitigated by capital, the Firm has adopted the EUCRR requirements for Pillar 1 where the Board considers that the Pillar 1 calculations do not adequately reflect the risk, additional capital is added on in Pillar 2.

Whilst the ICAAP and ICARA are formally reviewed by the Board once a year, Senior Management review risks and the required capital more frequently and will particularly do so when there is a planned change impacting risks and capital or when changes are expected in the business environment potentially impacting the ability to generate income.

As of 31/12/21 the firm’s CAR is of 61.09%.

4.1 Capital Resources

The Firm is a Non-SNI (Non-Small and Non-Interconnected) firm.

A Non-SNI firm must maintain at all times a permanent minimum capital resources (PMR) equal to or in excess of the base requirement (£50k) for Year 2022, and over the next 5 years the PMR will transition to reach £750K. The Pillar 1 capital requirement for a Non-SNI firm is the higher of:

  • Permanent Capital Requirement OR
  • Credit Risk plus Market Risk plus Counterparty Risk Capital Requirements OR
  • Fixed Overhead Requirement
  • K-Factor Metrics (KFR): (Daily Trading Flow “K-DTF”)

The Firm must maintain at all times capital resources equal to or in excess of the Pillar 1 requirement. During the 12-month accounting period to 31st December 2021, the Company complied fully with all capital requirements and operated well within regulatory requirements. As at 31st December 2021 the firm held Tier 1 capital resources of c. £ 1,266,663 comprised of ordinary share capital, share premium, and audited profit reserves. The Board are therefore comfortable that the Firm is, and has been throughout the financial year, adequately capitalised for Pillar 1 purposes. The Board are comfortable that this will ensure prudent capitalisation and cover for market downturns and other risks that may materialise in the short to medium term.

The Board constantly monitors the performance of the Firm and capital adequacy is regularly assessed by them. The Firm will also monitor risks throughout the year and decide if additional capital should be held against them. Additional risks that supplement the Pillar 1 requirements are detailed below and, where necessary, additional capital will be provided.

5 Management of Risk Framework

5.1 Risk Profile

Global Market Index Limited has identified the following core risk categories: e.g. strategic, market, credit, liquidity, operational, legal, interest rate, excessive leverage and financial crime.

Global Market Index Limited’s profile of these risks is continually evolving and is generally driven by:

  • Changes to the market in which we operate;
  • Global Market Index Limited’s strategies and business objectives and;
  • Global Market Index Limited’s business/operating models

Global Market Index Limited will seek to generate positive returns through carefully considered risk taking and robust risk management. As such the effective management and control of both the upside of risk taking and its potential downside is a fundamental core competency of the Firm.

5.2 Risk Appetite

The Board responsible for setting the Firm’s risk appetite, defining the type and level of risk that the Firm is willing to accept in pursuit of its business objectives.

5.3 Three Lines of Defence

The Firm’s governance structure is designed such that the business is the first line of defence, the compliance function is the second line of defence with the Board representing the third line of defence.

First line of Defence
Strategies and goals Firm Values Risk Appetites
Identification, control and management of risks. Operating requirements: roles and responsibilities, supervision, procedures, systems and controls
Identifying Risks Faced Identifying Risks Taken
Control and Management of Risks
Second line of Defence Risk Management Framework
First line of Defence
Strategies and goals Firm Values Risk Appetites
Identification, control and management of risks. Operating requirements: roles and responsibilities, supervision, procedures, systems and controls
Identifying Risks Faced Identifying Risks Taken
Control and Management of Risks
Second line of Defence Risk Management Framework
Policies and Procedures, Guidance and Training
Third Line of Defence
Senior Management/Board
Full accountability for the management of risks

5.4 Risk Assessment Framework

The Board responsible for approving the Risk Assessment Framework, which is used to ensure that the Firm has a comprehensive understanding of its risk profile, including both existing and emerging risks facing the Firm, and to enable it to assess the adequacy of its risk management in the context of the Firm’s risk appetite.

Principal RisksAppetiteKey DriversMitigation
Strategic Risk
The risk that arises
decisions that fail to
reflect the full business
operating environment
and the impact of failing
to adequately identify
changes to the business
The Firm will remain
competitive by identifying
opportunities and
assessing the risks,
rewards and costs
associated with them
before proceeding
Regulatory landscape
impacting the business.


business/operating model
Due diligence is carried out
prior to any new business
opportunity and a full
assessment of the potential
and actual risks taken into

Appointment of external
compliance consultants
Counterparty Credit Risk
The risk of financial loss
due to the failure of a
customer to meet their
obligations to settle
outstanding amounts
The Firm will only engage
in activities where
customers have adequate
collateral deposited
Market conditions

Counterparty credit
The Firm uses the
standardised method of
calculating Credit Risk. The
firm also has also employed
a risk specialist to monitor
the risk.
Market Risk
Risk of losses in on and off
balance sheet positions
arising from adverse
movements in market
The Firm does not engage
in propriety trading and
does not actively seek
market exposure. The firm
acts on a matched
principle basis only.
Volume and complexity of

Market movements

Risk department monitors
market conditions
Liquidity Risk
The risk that the Firm does
not have sufficient liquid
resources or is unable to
deploy such resources to
meet its actual or
potential obligations in a
timely manner as they fall
The Firm will have
sufficient and accessible
financial resources as to
meet any financial
obligations as they fall
due. The firm has always
held significantly more
than its minimum
Operational risk

Credit risk events

Internal business
operating model
Daily reviews of financial

Contingency funding
arrangements in place
Operational Risk
The risk of loss resulting
from inadequate or failed
internal processes, people
and systems, or from
external events
The Firm will actively
identify and manage the
risk of its people,
processes or systems
failing. Operational risk is
inherent in any business
however the Firm will take
steps to prevent such risks
from increasing operating
Internal business
operating model

External threats

Market conditions
Employees provided training
and guidance on their

Timely escalation and
mitigation of identified risks

BCP is updated regularly
Risk of Excessive Leverage
The potential increase in
risk caused by a reduction
in the Firm’s own funds
through expected or
realised losses.
The Firm will only engage
in activities where
collateral is held

The Firm will have
adequate financial
resources in place
Operational risk

Market conditions

Collateral is monitored and
trading margin managed

Regular reviews of financial

Excessive leverage is not
Financial Crime Risk
The risk that the Firm fails
to prevent its involvement in or use by other parties
to commit financial crime
The Firm has no appetite
for any breaches or lapses
occurring that result in financial crime taking
External threats
Internal controls
Training is provided to all
employees regularly Financial crime procedures
and regular monitoring

6 Remuneration Policy

Global Market Index Limited’s Remuneration Policy complies with the Remuneration Code in relation to its size, nature, scope and complexity of our activities.

The Policy is aligned to the Firms’ business strategy, objectives, values and long term interests in respect of performance and effective risk management in line with the Firm’s risk appetite.

A copy of the Firm’s Remuneration Policy is available on request.