Global Shares Disclosure Statement

The purpose of this document is to set out the Pillar 3 disclosures of Global Shares Execution Services Limited as at 31 December 2021.

Global Shares Execution Services Limited, (GSESL) a wholly owned subsidiary of Global Shares Public Limited Company, is licensed to conduct investment services business under the Investment Services Act by the Malta Financial Services Authority (“the MFSA”). All employees are bound by the rules of the MFSA and all applicable legislation.

The Investment Firms Regulation (“IFR”) requires investment Firms to consider the relationship between their risk and capital under Basel II. This is set out in the three Pillars approach:

Pillar 1 – sets out a firm’s minimum capital requirements in relation to market, credit and operational risk requirements; 

Pillar 2 – firms and regulators assess whether capital held is sufficient to cover risks to which a firm is exposed. This process known as the Internal Capital and Risk Assessment is the responsibility of the firm;

Pillar 3 – develops a set of disclosure requirements to be fulfilled regarding our capital and risk management process. 

The disclosures will be reviewed on an annual basis at a minimum and, if appropriate, more frequently. Disclosures will be published as soon as is practicable following any revisions. The Firm will not publish information which it regards as proprietary, confidential or where it is not material.

This disclosure is published on the Global Shares Group website

Global Shares Execution Services Limited (the “Firm”) is regulated by the MFSA under the Markets in Financial Instruments Directive (MiFID).

The Firm has a corporate governance framework in place, and the Board of the Firm meets four times annually to discuss company performance, effectiveness, future strategy and policies.

The Firm has in place:

• A transparent, independent, active and clearly defined Board of Directors, and senior management team that allows the business in Ireland to be managed independently as part of the Global Shares’ Group;
• A well-defined and transparent organisation which regularly communicates with all staff and reviews strategies, policies and procedures on an ongoing basis;
• A well-managed business with a clearly defined risk culture;
A business that has internal control systems and processes appropriate to its scale and complexity which ensure segregation of duties;
• A business that adopts a high ethical standard and appropriately rewards, promotes and selects personnel to ensure appropriate personnel are always in place;
• Low risk appetite and profile and holds more capital than its capital requirement, Pillar 1 calculation; and A robust management framework that is well developed, with an independent compliance resource.

Risk Management
The Firm considers risk management and control to be an integral part of its organisation and management. The firm takes a holistic approach to risk management, believing that no one risk or control can be properly managed in isolation. The Firm’s management is committed to maintaining a sound control framework for the implementation and operation of well-controlled business processes. Overall responsibility rests with the board, but the approach requires all employees to be involved.

The following summarises the main risks we see in our businesses:

Credit Risk
Credit risk is defined as the current or prospective risk to earnings and capital arising from counterparty’s failure to meet the terms of any contract or its failure to perform as agreed. The Firm incurs credit risk as a result of cash and securities held with third party banks and custodians. Credit exposures to third parties are monitored by the Compliance & Risk Control Function and there are effective processes in place to recover any monies due to the firm.

Operational Risk
Operational risk arises as a result of inadequate or failed internal processes, people, systems or external events. Hence operational risks include IT, information security, project outsourcing, legal, fraud and compliance risks. The Firm as part of Global Shares Group has processes in place to mitigate against its main risks. Recruitment follows a robust process where each potential candidate is rigorously interviewed. Internal processes are designed and adhered to in such a way that the probability of occurrence of any operational risk or potential operational risk is kept to a minimum. Strong system support and a tested business continuity plan are in place to prevent system errors.

Reputational Risk
The Firm operates within required compliance and company law guidelines. To date it has managed any potential reputational issues professionally and effectively.

Insurance Risk
The Firm have suitable insurance cover in place and the Firm is not considered to have material exposure to insurance risk.

Market Risk
The Firm does not trade on its own account and therefore is not exposed to adverse market movements.

The Firm has established an Internal Capital and Risk Assessment to calculate its Pillar 2 requirements. Capital is managed within the regulatory framework within which the Firm operates and there are regular checks and reviews of its adequacy to mitigate against the risk of insolvency of either Firm. 

The Board reviews and sign off on the Firm’s Internal Capital and Risk Assessment is at least annually unless any changes to the business may suggest that the current level of financial resources are no longer adequate in which case an additional review will be undertaken.

As at 31 December 2021, GSESL complied with the regulatory capital requirements of the MFSA (the jurisdiction and regulator of GSESL). 

GSESL has a total €1,231,147.00 in capital and reserves. GSESL’s capital requirement is €990,989.00.
February 2022