4 For the other business lines corporate finance agency services and retail

4 for the other business lines corporate finance

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4. For the other business lines (corporate finance, agency services, and retail brokerage), gross income consists of net fees or commissions earned in each of these businesses. 5. Gross income mapped to payment and settlement consists of fees generated from payment or settlement activities associated with other commercial entities. 6. Asset management activity means management of assets on behalf of customers. 226
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Annex 3 Classification of Operational Loss Event Types Event-type Category (Level 1) Definition Category (Level 2) Operating Activities (Level 3) Internal fraud Losses due to acts of at least one internal party intending to defraud, misappropriate property or circumvent regulations, the law or company policy (excluding diversity/discrimination events) Unauthorized activity Transactions not reported (intentional), transaction type unauthorized with monetary loss, mismarking of position (intentional) Theft and fraud Fraud/credit fraud/untruthful deposit, theft / extortion / embezzlement / robbery, misappropriation of assets, malicious destruction of assets, forgery, check kiting, smuggling, account take-over / impersonation, tax non-compliance / evasion (willful), bribes / kickbacks, insider trading (not on firms’ account) External fraud Losses due to acts of a third party intending to defraud, misappropriate property or circumvent the law Theft and fraud Theft/robbery, forgery, check kiting System security Hacking damage, theft of information with monetary loss Employment practices and workplace safety Losses arising from acts inconsistent with employment, health or safety laws or agreements, from payment of personal injury claims, or from diversity/discrimination events Employee relations Compensation, benefit, termination of employment, organized labor activity Safe environment General liability, employee health & safety rules, worker compensation Discrimination All discriminative acts. Clients, products and business practices Losses arising from an unintentional or negligent failure to meet a professional obligation to specific clients (including fiduciary and suitability requirements), or from the Suitability, disclosure & fiduciary Fiduciary breaches / guideline violations, suitability / disclosure issues, retail finance disclosure violations, breach of privacy, aggressive sales, account churning, misuse of confidential information, lender liability 227
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Event-type Category (Level 1) Definition Category (Level 2) Operating Activities (Level 3) nature or design of a product Improper business or market practices Antitrust, improper trade / market practices, market manipulation, insider trading on firm’s account, unlicensed activity, money laundering Product flaws Product defects, model errors Selection, sponsorship and exposure Failure to investigate client credit, exceeding client exposure limits Advisory services Disputes over performance of advisory activities Personnel or asset damages Losses arising from natural disaster or other events Disasters and other events Natural disaster losses, losses from
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