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A. IRRBB - Management Framework & Governance
GUIDANCE
AFSA Guidance for Over-the-Counter Transactions with Digital Assets
Guidance for AIFC Banks conducting settlement for Digital Asset Trading Facility Operators and Digital Asset Service Providers
The List of financial services and ancillary services provided by the Astana International Financial Centre participants, subject to the financial monitoring
SELF-ASSESSMENT OF INTERNAL QUALITY CONTROL MONITORING PROGRAM
Guidance to AIFC Anti-Money Laundering and Counter – Terrorist Financing Framework
Practical Guidance to AIFC Anti-Money Laundering and Counter – Terrorist Financing Framework
Entire Act

A. IRRBB - Management Framework & Governance

1. This section of the BPG sets out the standards, guidance and norms required to fulfil the regulatory requirements in respect of the Risk management framework and governance addressing IRRBB, as specified in Section 8.1 of Chapter 8 of BBR. These elements convey the supervisory expectations of the AFSA regarding the framework for management of IRRBB and its governance. The AFSA will use these standards, norms and key elements specified here to assess compliance with BBR Rules on management of its IRRBB exposures.


2. A Bank’s IRRBB management policy is expected to address the following:


(a) effective systems for the accurate and timely identification, measurement, evaluation, management and control or mitigation of IRRBB, and reporting to the firm’s governing body and senior management;


(b) regular review, and independent internal or external validation, of any model used by the firm to manage IRRBB (including review of significant assumptions);


(c) prudent and appropriate limits that are consistent with the firm’s risk tolerance, risk profile and capital;


(d) procedures for tracking and reporting exceptions and deviations from limits;


(e) the use of the output of the risk measurement under the policy to report the level of that risk to the senior management and governing body of the Bank;


(f) the measurement to be capable of measuring the risk using the earnings approach;


(g) the measurement to be clearly defined and consistent with the nature and complexity of the structure of the firm’s balance sheet;


(h) provide for balancing cash flows as part of managing IRRBB; and


(i) approval by the governing body, or a committee of the governing body, of any major hedging or risk-management initiatives.

Governing Body responsibilities

2. The GEN Rules include Rules and Guidance regarding corporate governance requirements for Banks, including the responsibilities of a Bank regarding risk management. In addition to that, the standards and guidance provided under this section set out the expectations of the AFSA in respect of a Bank’s approach and performance in meeting the regulatory requirements relating to the role of its Governing Body in managing its IRRBB exposure.


3. The governing body of a Bank may delegate the responsibility for establishing the management and governance framework for IRRBB, including but not limited to policies and strategies to a committee of the governing body, like Asset & Liability Committee (ALCO), which is the designated senior management committee for managing balance sheet structure and interest rate risk associated with it.


4. A Bank that conducts banking activities or complex principal dealing activities should establish a committee to design and implement a framework for IRRBB management. This committee may be the same as that described in 4 above.