HAITONG BRAZIL | RISK COMMITTEE
1. Regulatory Framework
The Integrated Risk and Capital Committee, known as the “Risk Committee”, of the Conglomerado Prudencial Haitong Brasil (Haitong Banco de Investimento do Brasil S.A., Haitong Securities do Brasil CCVM S.A., Haitong DTVM do Brasil S.A., Haitong Negócios S.A., in addition to the FIM Treasury Cred Priv IE and Western Star Fund Ltda), is established pursuant to Resolution 4.557, of February 23, 2017 and subsequent amendments.
Haitong Brasil is currently included in “Segment 3” (S3) under the terms of Resolution 4.553 of January 30, 2017 and the Risk Committee's operation and regulation follows the requirements required for this segmentation.
▪ The Risk Committee is a collegiate body, non-statutory of a permanent nature and with deliberative powers, which reports and aims at advising the Board of Directors of Haitong Brasil regarding the exercise of its duties related to the integrated management of risks and capital.
▪ The Risk Committee shall perform its duties and actions in accordance with the decisions and resolutions of the Board of Directors, the institution's internal rules and applicable legislation in force.
3. Subordination and Reporting
▪ The Risk Committee will respond and report its activities to the Board of Directors of Haitong Brasil.
The Haitong Brasil Risk Committee will be composed of at least 03 (three) and at most 05 (five) members who are formally appointed and removed by the Board of Directors.
Currently, the composition of the Risk Committee is as follows:
▪ Voting Members:
• Mr. Alan do Amaral Fernandes (Coordinator): CEO of Haitong Brasil;
• Mr. Afonso do Campos Pinto: Independent member; and
• Mr. Auro Pagnozzi: Independent member.
▪ CRO: Mr. Carlos José Caetano Guzzo.
▪ The Risk Control Department is the Advisory Office of the Risk Committee and the Legal Department fulfills the role of Secretariat.
5. Responsibilities of the Risk Committee
The duties of the Haitong Brazil Risk Committee cover the following duties:
(i) Propose, at least annually, to the Board of Directors to review and update the risk and capital management policies and structure, the Conglomerate Risk Appetite Statement (RAS), the strategies and limits for specific risks and materials;
(ii) Monitor the evolution of the risks assumed by the Conglomerate and its adherence to the risk appetite levels established in the RAS and report them to the Board of Directors and the Executive Board;
(iii) Identify and report deficiencies and deviations in risk management and related to RAS to the Board of Directors and the Executive Board;
(iv) Supervise compliance, by the Executive Board of the institution, with the terms of the RAS;
(v) Supervise the activities and performance of the CRO;
(vi) Monitor and report capital adequacy (PR, Tier I and Core Capital) to the risks incurred by the institution to the Board of Directors and the Executive Board;
(vii) Recommend annually to the Board of Directors a review and evaluation of the capital and liquidity plan with a three-year perspective and in accordance with the business plan contained in the strategic planning, as well as capital and liquidity contingency plans;
(viii) Review and validate the stress test program, from the perspective of integrated risk management, as well as its validation as an assumption to be used in capital monitoring;
(ix) Propose a recovery plan to the Executive Board and the Board of Directors, and in its possible execution, monitor the adoption of the strategies provided for in the plan, as well as the conclusion of its execution;
(x) Review and assess the adequacy of the institution's risk management;
(xi) Be aware of the rules proposed and/or applied by the Basel Committee on Banking Supervision (BCBS), estimate the impacts of their adequacy and monitor their implementation in the institution;
(xii) Be aware of the work performed by the internal and external audits relevant to risk and capital management and their results;
(xiii) Propose to the Board of Directors amendments to these regulations, when necessary;
(xiv) Fulfill other duties determined by the Board of Directors; and
(xv) Keep records of its resolutions and decisions.
The members of the Risk Committee will have independence in the exercise of their duties, and must keep the information received confidential.
6. Meetings and Resolutions: Frequency, Functioning and Right to Vote
▪ In order to fulfill its duties, the Haitong Brazil Risk Committee will meet on a regular basis every two months or, on an extraordinary basis, whenever necessary, convened at least 03 (three) business days in advance, except for subject(s) that require urgent consideration.
▪ The Risk Committee will meet in person, provided that it contains the majority of its members and always with the mandatory participation of the Chairman of the Committee. Members who participate by video or audio conference and other electronic means will also be considered present.
▪ The Risk Committee will decide by the vote of the majority of the members present at the meeting, with one vote for each member and the casting vote for the Coordinator, in the event of a tie.
▪ The Committee may invite other members of the Executive Board, experts or even employees who hold relevant information and whose subjects on the agenda are related to their area of expertise to participate in its meetings.