Please carefully read the following important information regarding the contents of this website, and SKDhonsi.

SKDhonsi Limited is authorised and regulated by the Financial Conduct Authority. FRN: 759206

All contents of this website are for informational purposes only. The site or its contents are not an offer or solicitation for any financial instrument or financial services (whether regulated or not).

This document and its contents are not suitable or appropriate for retail investors and are strictly for professional investors / professional clients only.

UK Stewardship Code

Any BIRPU firm which manages investments for professional clients that are not natural persons must disclose on its website:

1. The nature of its commitment to the Financial Reporting Council’s Stewardship Code
   -or-
2. Where it does not commit to the Code, its alternative investment strategy

SKDhonsi Limited is a BIRPU firm, and is authorised and regulated by the FCA (FRN:759206). SKDhonsi Limited’s investment strategy involves building a diverse portfolio with highly liquid instruments. Although we monitor all securities including all investee companies as part of our investment process we do not expect to actively engage with any of our investee companies and we don’t consider that our clients would have such expectations. Also, as part of our approach we do not expect to be active in any voting matters of investee companies.

If our investment strategy changes whereby the UK Stewardship Code becomes more relevant we will amend our disclosure accordingly.

Pillar 3 Disclosure Statement

SKDhonsi Limited(“SKDhonsi” or “the Company”) is authorised and regulated by the UK Financial Conduct Authority (“FCA”) as a BIRPU firm and as such is subject to the capital adequacy rules set out in the Financial Conduct Authority’s (“FCA”) BIPRU sourcebook.  As a BIPRU firm SKDhonsi is subject to rules set out in the third European Capital Adequacy Directive (“CRD III”) and is not required to follow the rules of the fourth European Capital Adequacy Directive (“CRD IV”).

The FCA capital adequacy framework consists of three Pillars:

• Pillar 1 sets out the minimum capital amount that meets the Firm’s credit, market and operational risk;
• Pillar 2 requires the Firm to assess whether its Pillar 1 capital is adequate to meet its risks and is subject to annual review by the FCA (the ICAAP as set out below); and
• Pillar 3 requires disclosure of specified information about the underlying risk management controls, capital position and remuneration.  This document is SKDhonsi’s Pillar 3 disclosure statement.

As required by the rules of the FCA the Company has undertaken   an ‘Internal   Capital   Adequacy   Assessment Process’ (“ICAAP”).  The ICAAP is reviewed annually or whenever there is a material change to the business, whichever is sooner.  The Company undertook its first review at the time of authorisation by the FCA on 16 November 2016. The ICAAP process considered the risks that the Company is exposed to and the controls that exist to mitigate those risks.  It further considered whether additional capital was required to meet the risks that the Company faces including, as required by the FCA rules, the potential cost of closing the Company down in the unlikely event that such action was necessary.  The Company’s Pillar 1capital requirement is the higher of the base capital requirement of EUR 50,000, the sum of the credit risk and market risk requirements and the fixed overhead requirement.  Currently the base capital requirement is in excess of the alternative capital requirements and the capital requirement amounts to EUR 50,000 or GBP 43,000.  The company has assessed that there is no additional capital requirement under Pillar 2 and thus the Pillar 2 Capital requirement is also £43,000.

Risk Management

The Company is an asset manager and does not risk its own capital in the financial markets. The Company does not have regulatory permission to take proprietary trading risk and does not take such risk.    Accordingly, the risks that the Company faces are more limited in scope than for other types of regulated firms.  The risks and controls detailed below are, in accordance with the BIPRU rules, risks that the Company faces in respect of its own activities.  The risk management processes and controls for monies managed by the Company are not part of these disclosures.

Capital

The capital of the Company is in the form of share capital.  All of the capital of the company is Tier 1 capital.  The Company had Tier 1 capital of £60,000 all of which in in the form of share capital.

Approach to risk

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

Principal risks and uncertainties

Market risk

For the purposes of these disclosures, market risk is the risk value of, or income arising from, the Company’s assets and liabilities varying as a result of changes in the market price of financial assets, changes in exchange rates or changes in interest rates.

The Company does not take proprietary trading risk. The Company’s risk management activities are on behalf of clients and the Company’s own money is not at risk. The only market risks that the Company potentially faces are: risks related to the short-term investment of surplus cash belonging to the Company and currency risk due to the potential mismatch of the currencies in which income is earned and the currencies in which costs are incurred.

For capital adequacy purposes, in accordance with the rules, the Company monitors its current exposure due to amounts held and receivable in currencies other than sterling. The members consider potential future exposures as part of their overall risk monitoring.

Credit risk

Credit risk refers to the potential risk that the Company’s bankers or customers fail to meet their obligations as they fall due.

The Company currently has no credit risk on its clients for fees earned but not received. The Company has appropriate policies to monitor this exposure on an ongoing basis.

The Company also has credit exposure to its bankers and monitors this risk regularly.

Liquidity risk

The Company’s liquidity policy is to maintain sufficient liquid resources to cover cash flow imbalances and fluctuations in fees received/receivable.  The Company maintains cash balances at its bankers to cover liquidity risk.

Operational risk

Operational risk is the risk of loss arising from failed or inadequate internal processes or systems, human error or other factors. The risk is managed by the members who have responsibility for putting in place appropriate controls for the business. The Company documents the risks that it is exposed to and the compensating controls in its ICAAP.

Business risk

Business risk is the risk that the Company may not be able to carry out its business plan and could therefore suffer losses if its income falls.  This is a risk that all businesses face. The members continuously monitor income and expenditure levels and adjust their plans accordingly.

Concentration risk

Concentration risk is the risk that the Company is overly dependent upon any one customer or any one group of connected customers either in terms of income dependency or in terms of credit risk.  Currently the only such exposure is to the Company’s bankers.

Pension obligation risk

The Company has no defined benefit schemes and thus has no pension obligation risk.

Interest rate risk

The Company is not exposed to interest rate risk.

Residual risk

Residual risk is any risk not covered by the specific risk categories outlined above.

The  members  do not  consider  that  there  are  any  residual  risks  that  require  the  Company  to maintain  any additional capital.

Overall Capital Summary

Remuneration disclosures

Under the Remuneration Code (the “Remuneration Code”), the Company, as is standard for an investment management firm, is classified as a Proportionality Level three firm.    Proportionality Level three firms are permitted to disapply many of the technical requirements of the Remuneration Code and proportionately apply the Remuneration Code’s rules and principles in establishing the Company’s policy.

As at 31 December 2016 the Company had 1 Code Staff member.  The Company has only one business area which is its investment management business.  The Company is in its start-up phase and does not expect to pay any remuneration to its code staff in the current financial year.

The Decision-Making Process

The Company has concluded that, on the basis of its size, the nature, scale and complexity of its legal structure and business and the nature of the risks that it takes on behalf of clients, it does not need to appoint a remuneration committee.  The Company believes that its Remuneration Policy appropriately addresses potential conflicts of interest and that the Company’s authorised persons are not rewarded for taking inappropriate levels of risk.   The policy is reviewed at least annually and will be amended, as and when required due to changes in regulation as well as the Company’s own decision-making process.

The link between pay and performance

The Company is in a growth phase and variable remuneration is not currently paid due to a desire to preserve the capital of the Company

Quantitative Remuneration Data

As the company is in its start-up phase it is not paying remuneration to Code Staff and there are no disclosures to make under either:

• BIPRU  11.5.18R (6) (aggregate quantitative information on remuneration, broken down by business area); or
• BIPRU  11.5.18R(7)  (aggregate quantitative information, broken down by senior management and members of staff whose actions have material impact on the risk of the firm). Type your paragraph here.