Squared Financial Services Limited

Background The Firm is authorised under the MiFID Regulations as an investment firm, and is obliged to comply with the large exposure requirements under the Capital Adequacy Regulations. These requirements set certain limits on the permitted exposures and require firms to report details of their exposures to the Central Bank. The Firm reported breaches of these requirements to the Central Bank in October 2012. The large exposure requirements are imposed on investment firms to limit the level of exposure which a firm may have to one person or entity, or group of connected persons/entities, in order to contain the loss a firm may experience in the event of the failure of an entity to which the firm is exposed. Investment firms are required to submit large exposure returns to the Central Bank setting out details of the levels of their large exposures against the limits set out in the Capital Adequacy Regulations. Penalty decision factors The penalties imposed in this case reflect the importance the Central Bank places on compliance with the large exposure requirements set out in the Capital Adequacy Regulations and having adequate internal controls in place to ensure that at all times a firm is in compliance with the limits.