4914. Role of an appropriate Executive

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    1. An appropriate Executive must ensure that for derivative products:

      1. The Dealer Member’s policies and procedures specifically address processing, trading, monitoring and reporting cycles including:

        1. clear responsibility lines for risk management,

        2. an adequate system for measuring risk,

        3. appropriate risk position limits,

        4. effective internal controls, and

        5. a comprehensive reporting process,

      2. if risk position limits are exceeded, there is a system to ensure that these excesses are approved only by authorized employees and communicated to an appropriate Executive,

      3. all appropriate approvals are obtained and adequate operational procedures and risk control systems are in place,

      4. appropriate risk control systems address market, credit, legal, operational, and liquidity risks,

      5. derivatives activities are undertaken by a sufficient number of professionals with appropriate experience, skill levels, and certification,

      6. risk management procedures are regularly evaluated for appropriateness and soundness,

      7. it approves all standard and non-standard derivative product programs, 

      8. there is an accurate, complete, informative, and timely management information system, and

      9. the risk management function monitors and reports risk metrics to the Dealer Member’s  appropriate Executives and to the Dealer Member’s board of directors or equivalent.

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