Pillar 3 Disclosure

Home » Regulatory » Pillar 3 Disclosure

Principle Activities

OMBA Advisory & Investments Limited (“Omba”) is authorised and regulated by the Financial Conduct Authority in the United Kingdom (Firm number: 775647).
We are authorised to manage money for and advise both professional and retail customers.

We are not authorised to take in client money but we are authorised to arrange for safeguarding of client assets.

Pillar 3 Disclosures

This is the Pillar 3 disclosure made in accordance with the UK Financial Conduct Authority (FCA) Prudential Sourcebook for Banks, Building societies and Investment firms (BIPRU).

The European Capital Requirements Directive (CRD) created a regulatory capital framework consisting of three ‘pillars’:

  • Pillar 1 establishes the minimum capital requirements given the credit, market and operational risks;
  • Pillar 2 deals with the Internal Capital Adequacy Assessment Process (“ICAAP”) which is a document produced by Omba that assesses the risks faced by the business, the controls on those risks and the capital required to sustain such risks;
  • Pillar 3 requires Omba to publish certain details about its risks and risk management process.

This Pillar 3 Disclosure has been subject to internal review procedures. The information has not been audited by the firm’s external auditors and does not constitute any form of financial statement.

Disclosure Policy

The rules in BIPRU 11 provide that the firm may omit one or more of the required disclosures if it believes that the information is immaterial. Materiality is based on the criteria that the omission or misstatement of material information would be likely to change or influence the assessment or decision of a user relying on that information for the purposes of making economic decisions. Where the firm considers a disclosure to be immaterial, this will be stated in the relevant section.

The firm is also permitted to omit one or more of the required disclosures where it believes that the information is regarded as proprietary or confidential. Proprietary information is that which, if it were shared, would undermine the firm’s competitive position. Information is considered to be confidential where there are obligations binding the firm to confidentiality with its clients and counterparties.

Where the firm has omitted information for any of the above reasons, a statement explaining this will be provided in the relevant section.

Unless stated as otherwise, all figures contained in this disclosure are based on the firm’s audited annual reports for the year ending 30 June 2020.


These Pillar 3 Disclosures will be reviewed on an annual basis as a minimum. The disclosures will be published as soon as is practical following the finalisation of the firm’s Internal Capital Adequacy Assessment Process (ICAAP) and the publication of its annual report.
Our firm’s Pillar 3 Disclosure reports are published on our website.

Risk management objectives and policies

Omba has identified and performed an assessment of the key risks that may impact its business. The Firm is an adviser and investment manager and does not undertake proprietary trading. The material risks largely fall within the “Business Risk” and “Operational Risk” categories.

Credit risk

Using appropriate and effective systems, the Firm maintains the ongoing administration and monitoring of its various credit risk-bearing exposures (those of the Firm, not of the client). In the Firm’s case, this arises from the failure of counterparties or other debtors to pay amounts owed, principally invoices raised on investment services. We have not incurred any bad debts and due to the nature of our client base we assess this risk as low. Additional receivables deemed low-risk are generally in the form of deposits or pre-payments.

Market Risk

The Firm does not suffer Trading Book Market Risk, as it does not trade the Firm’s capital on a proprietary basis. The Firm is subject to non-Trading Book Market Risk – the market risk of assets held on its Balance Sheet.

The Firm’s only potential exposures are non-trading book exposures to foreign currency assets or liabilities held on its balance sheet. The firm has assets denominated in US dollars, namely cash and accounts receivable. The associated risk is low with the quantum of the foreign exchange risk being disclosed in the annual financial statements.

Interest Rate Risk

Interest Rate Risk is not applicable to the Firm as it holds no significant assets or liabilities subject to interest rate risk, and, as such, there are no procedures in place to cater for it.

Business & Operational Risk

The Firm implements policies and processes to evaluate and manage its exposure to business and operational risk, including low-frequency, high-severity events.

Business risk is defined as any risk to the Firm arising from changes in its business, including the risk that the Firm may not be able to carry out its business plan and its desired strategy.

Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events.

The above risks include real risks to the Firm, such as outsourcing risk associated with key service providers, for example: IT; key individuals leaving and internal disputes; provision of poor services; bad publicity; politics/terrorism; loss of key clients and; regulatory breaches and risks including Market Abuse and Money Laundering. These risks are assessed in the Firm’s ICAAP.

Our greatest risks relate the operational capability of the custodians our clients use for the custody of their assets and execution of their orders. Although these are risks our clients accept when selecting a custodian and broker, if we feel the risks to our client become excessive due to concentration of business with one custodian, a custodian running into problems etc, we highlight these risks to the client. If we assess that the custodian and executing brokers pose significant risk, we highlight this to our clients.

Liquidity risk

The firm has no borrowings and holds sufficient cash reserves to meet the continued operating needs of the business. This is supported by a robust budgeting and forecasting process which has the full involvement of directors.

Capital resources

Pillar 1 requirement
In accordance with GENPRU 2.1.45R (calculation of variable capital requirement for a BIPRU firm), our capital requirement has been determined as being our fixed overhead requirement and not the sum of our credit risk capital requirement and our market risk capital requirement.
As of 30 June 2020, this amount was £81,000.

Pillar 2 requirement
Our overall approach to assessing the adequacy of our internal capital is set out in our Internal Capital Adequacy Assessment Process (ICAAP). The ICAAP process involves separate consideration of risks to our capital combined with stress testing using scenario analysis. The level of capital required to cover risks is a function of impact and probability. We assess impact by modelling the changes in our income and expenses caused by various potential risks over a 3-year time horizon. Probability is assessed subjectively.

Regulatory capital
The firm holds regulatory capital in accordance with the Capital Requirements Directive. All such capital is classified as Tier 1 capital and is therefore of the highest quality.