Principles for business line mapping
6. All activities should be mapped into the eight level 1 business lines in a mutually exclusive and jointly exhaustive manner.
7. Any activity which cannot be readily mapped into the business line framework, but which represents an ancillary function to an activity included in the framework, should be allocated to the business line it supports. If more than one business line is supported through the ancillary activity, an objective mapping criteria should be used.
8. When mapping gross income, if an activity cannot be mapped into a particular business line then the business line yielding the highest charge should be used. The same business line equally applies to any associated ancillary activity.
9. An Authorised Person may use internal pricing methods to allocate gross income between business lines, provided that total gross income for the firm (as would be recorded under the Basic Indicator Approach) still equals the sum of gross income for the eight business lines.
10. The mapping of activities into business lines for Operational Risk capital purposes should be consistent with the definitions of business lines used for regulatory capital calculations in other risk categories, i.e. credit and Market Risk. Any deviations from this principle should be clearly motivated and documented.
11. The mapping process used should be clearly documented. In particular, written business line definitions should be clear and detailed enough to allow third parties to replicate the business line mapping. Documentation should, among other things, clearly motivate any exceptions or overrides and be kept on record.
12. Processes should be in place to define the mapping of any new activities or products and the mapping process to business lines should be subject to independent review.
Table — Mapping of Business Lines
|Level 1||Level 2||Activity Groups|
|Corporate Finance||Corporate Finance||Mergers and acquisitions, Underwriting, privatisations, securitisation, research, debt (government, high yield), equity, syndications, IPO, secondary private placements.|
|Trading and Sales||Sales||Fixed income, equity, foreign exchanges, commodities, credit, funding, own position Securities, lending and repos, brokerage, debt, prime brokerage.|
|Retail Banking||Retail Banking||Retail lending and Deposits, banking services, trust and estates.|
|Private Banking||Private lending and Deposits, banking services, trust and estates, investment advice.|
|Card Services||Merchant/commercial/ corporate cards, private labels and retail.|
|Commercial Banking||Commercial Banking||Project finance, real estate, export finance, trade finance, factoring, leasing, lending, guarantees, bills of exchange.|
|Payment and Settlement||External Clients||
Payments and collections, funds transfer, clearing and Settlement.
Note: Payment and settlement losses related to an Authorised Person's own activities would be incorporated in the loss experience of the affected business line.
|Agency Services||Custody||Escrow, depository receipts, Securities lending (customers) corporate actions.|
|Corporate Agency||Issuer and paying agents.|
|Corporate Trust||- N/A|
|Asset Management||Discretionary Fund Management||Pooled, segregated, retail, institutional, closed, open, private Equity.|
|Non-Discretionary Fund Management||Pooled, segregated, retail, institutional, closed, open.|
|Retail Brokerage||Retail Brokerage||Execution and full service.|