Risk Management, Own Funds and Own Funds Requirements

Liquidity Risk

The Liquidity requirement for the Company is €217,807 being one third of the Fixed Overhead Requirement.  As at 31 December 2021, the Company held total liquid assets for the value of €807,124.  The value of which has been calculated using the applicable haircuts as required by the Investment Firms Regulation.  In view that the Company has access liquidity of more than 3 times over the minimum requirement, it is considered that the Company’s exposure to Liquidity Risk is insignificant.

Own Funds and Own Funds Requirement

2021

Own Funds ‑ Tier 1 Capital As per audited financial statements and as per regulatory scope
Share capital           279,553
Retained earnings       1,076,136
Revaluation reserve             43,091
Other reserves             34,405
Deduction from Tier 1 Capital – Intangible assets (220,486)
1,212,699

Own Funds and Own Funds Requirement

2021

  

Own Funds Requirement being the maximum of 1,2 and 3 below 653,422
1. Permanent minimum capital requirement           150,000
2. Fixed overhead requirement           653,422
3. Total K-Factor Requirement           138,494
               i. Risk to Market – N/A
               ii. Risk to Firm – N/A
               iii. Risk to Client – €138,494

Own funds of the Company exceed the Own funds requirement by 185%, honouring the minimum conditions as per Article 9 of the Regulation.  The Company measures and assesses that the minimum requirement is met on a regular basis, and as a minimum at the frequency of the regulatory reporting.  The adequacy of the Company’s internal capital is also considered as part of the budgeting process and in the event of a significant activity.

Governance

In line with Article 48 of the Investment Firms Regulation, the Company shall disclose information about its internal governance arrangements.  The board of directors of the Company is composed of 8 directors. The following are the number of directorships for each respective board member:

Board Member Number of Directorships
Mr Michael Gatt 13
Mr Jesmond Mizzi 4
Dr Mark Azzopardi 8
Mr John Catania 2
Mr Mark Camilleri 14
Mr Matthew Von Brockdorff 7
Ms Catherine Calleja 7
Mr Ian Edward Stafrace 1

The Company has in place a diversity policy with regard to the selection of members of the board of directors. The board of directors consists of both executive and non-executive directors who have a background with experience in other regulated bodies as well as professional and business background which all assist in enhancing the composition of the board. The Company believes that diversity of gender goes beyond gender and extends to business and industry skills and experience, professional and industry backgrounds, geographical experience, diversity of thoughts, as well as ethnicity. Additionally, the Company set a target of no less than 12.5% female representation on the Board.

The Company has in place a separate risk committee, referred to as JMFA Risk and Compliance Committee. The Committee meets at least on a bi-monthly basis and during 2021, the Committee met 6 times.

Remuneration Disclosures

The Company is required to disclose to the public, information regarding the remuneration policy and practices, including aspects related to gender neutrality and the gender pay gap, adopted by management for those categories of staff whose professional activities have a material impact on the firm’s risk profile.

The remuneration of the executive directors, senior management or staff who have a material impact on the firm’s risk profile is predominantly a fixed salary but bonuses are paid on an individual basis depending on their personal overall performance and on the overall performance of the Company. In aggregate during the financial year 2021, the fixed remuneration of such individuals amounted to a significantly high proportion of total remuneration. The fixed and variable ratio amounted to approximately 97:3.

The fixed remuneration is established on the role/responsibilities, work experience, and qualifications of the individual concerned. In terms of the variable remuneration, Key Performance Indicators (KPIs) are allocated to individual employees at outset, and at the end of each year assessed through a scoring system based on such KPIs. The employee can also be awarded an additional company performance bonus which is solely dependent on Company performance rather than Individual performance.

The Company recognises the importance of avoiding as much as possible conflicts of interest in the remuneration structure and as a policy ensures that the variable element is based on both quantitative and qualitative factors.

The Company has determined that senior management constitutes members of the Executive committee, the Compliance Officer and MLRO, whilst other management constitute staff who hold managerial positions (such as departmental managers) and/or who have a material impact on the firm’s risk profile.

The firm benefits from a derogation laid down in Article 32 (4) of Directive (EU) 2019/2034 on the basis of both point (a) and (b) of such Directive.

The quantitative information disclosed below pertains to the full financial year ended 31 December 2021 and is a total aggregate remuneration paid by the Company to senior management, risk takers and staff engaged in control functions.

Staff Category Number of Beneficiaries Fixed Variable
EUR EUR
Senior Management 8 755,000 14,750
Other Management 6 289,000 9,930

The Company ensures that when remunerating staff it applies gender neutrality and it does not differentiate between staff of “male, female or diverse” genders. This in fact reflected in the remuneration provided to management who have similar or equal seniority roles. Moreover, there is no material gender pay gap between members in a management position.

The Company does not award variable remuneration in the form of shares, share-linked instruments or any other similar types. During the financial year

2021 there were no amounts of deferred remuneration paid, nor severance payments.

The Company has not established a remuneration committee based on the basis of the principle of proportionality. The Board of Directors in its supervisory function adopts and periodically reviews the general principal of the remuneration policy and is responsible for overseeing its implementation.

Version: April 2022