| 5.1 | Financial Institutions must ensure effective governance arrangements are in place for the production, review and approval of the recovery plan, as well as the monitoring of its recovery indicators and its implementation.
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| 5.2 | Production, review and approval of the recovery plan:
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| | | 5.2.1 | The Financial Institution’s board of directors must assess and approve the recovery plan prior to its submission to the Central Bank.
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| | | 5.2.2 | For branches of foreign Financial Institutions, the recovery plan must be assessed and approved by the branch’s Senior Management committee.
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| | | 5.2.3 | For branches of foreign Financial Institutions, the Central Bank may require that, in addition to Article 5.2.2 above, the recovery plan is approved by the Board of Directors of the head office.
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| | | 5.2.4 | The chief risk officer is responsible for leading the development of the recovery plan along with the Senior Management.
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| | | 5.2.5 | The Financial Institution must ensure all relevant Senior Management including key persons in Control Functions have been involved in the production, review and approval of the recovery plan, including senior individuals from relevant business areas related to recovery plan options and those responsible for stress testing. In this context key persons in Control Functions refers to persons responsible for heading control functions.
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| | | 5.2.6 | The recovery plan must undergo a self-assessment and review by the Financial Institution’s internal audit function, before its submission for approval to the board of directors.
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| | | 5.2.7 | For governance arrangements to be effective, the Financial Institution must be prepared to demonstrate that the credibility and executability of the recovery plan in a severe stress has been sufficiently challenged to justify its approval. This includes the establishment of a development and approval process with an appropriate segregation of duties and controls between those accountable for the development of the plan and those who review and/or approve the plan.
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| | | 5.2.8 | An Islamic Financial Institution must, in addition, obtain approval from its Internal Shari’ah Supervisory Committee that the recovery plan is compliant with the Islamic Shari’ah Provisions.
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| 5.3 | Implementation of the recovery plan:
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| | | 5.3.1 | The recovery plan must include a clear escalation and decision-making process to determine its timely implementation, which should take into account the recovery indicators.
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| | | 5.3.2 | Decisions and actions must be associated to clearly defined roles and responsibilities assigned to key individuals.
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| | | 5.3.3 | Governance procedures for the communication plan must be included in the recovery plan and be consistent with governance procedures to implement the recovery plan.
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| 5.4 | Financial Institutions must have adequate systems in place to generate, on a timely basis, all relevant and up-to-date information required to support the recovery plan.
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| 5.5 | A Bank must ensure that the recovery plan is consistent with its liquidity contingency funding plan, and vice versa.
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| 5.6 | For an Insurance Company, the existing tools of its ERM framework may serve as a source of input when drafting and developing the recovery plan; these may include, but are not limited to, the ORSA, contingency plans and capital and liquidity risk management plans. |