Risk Management Procedure

(1) Group Risk Management Committee
The FHC and the subsidiaries hold risk management committee meetings periodically to ensure all risk control systems are working properly and monitor the Group’s risk exposure level.

(2) Risk Management System
The FHC and the subsidiaries have developed or applied risk management information systems for VaR calculation, credit scoring, credit risk alerting, conglomerate credit/investment limit, and operational event reporting.

(3) Risk Management Reporting
All risk management reports from the Group should be submitted to the risk management committee and the Board on a regular basis. Subsidiaries are required to notify the FHC’s risk management division prior to submission.
The FHC reviews the risk measurement indicators, concentration exposure, result of stress testing and the compliance of other risk management mechanisms on a regular basis and report the risk management status in March and August, 2020 to the Board of Directors. Besides, risk analysis targeting the COVID-19 pandemic and other major events have been conducted, and the quantitative research and output targeting climate change are being expanded gradually.