Title[ Annex
Section[ Annex 9
Detailed Loss Event Type Classification
Event-Type Category (Level 1) Definition Categories (Level 2) Activity Examples (Level 3)
Internal fraud Losses due to acts of a type intended to defraud, misappropriate property or circumvent regulations, the law or company policy, excluding diversity/ discrimination events, which involves at least one
Unauthorised Activity Transactions not reported (intentional) Transaction type unauthorised (w/monetary loss) Mismarking of position (intentional)
internal party Theft and Fraud Fraud / credit fraud / worthless deposits Theft / extortion / embezzlement / robbery Misappropriation of assets
Malicious destruction of assets
Forgery Check kiting Smuggling
Account take-over / impersonation / etc. Tax non-compliance / evasion (wilful) Bribes / kickbacks
Insider trading (not on firm’s account)
External fraud Losses due to acts of a type intended to defraud, misappropriate property or circumvent the law, by a third party
Theft and Fraud Theft/Robbery
Forgery
Check kiting
Systems Security Hacking damage
Theft of information (w/monetary loss)
Employment Practices and
Workplace Safety
Clients, Products & Business
Practices
Losses arising from acts inconsistent with employment, health or safety laws or agreements, from payment of personal injury claims, or from diversity / discrimination events
Losses arising from an unintentional or negligent failure to meet a professional obligation to specific clients (including fiduciary and suitability requirements), or from the nature or design of a product.
Employee Relations Compensation, benefit, termination issues
Organised labour activity
Safe Environment General liability (slip and fall, etc.) Employee health & safety rules events Workers compensation
Diversity & Discrimination All discrimination types
Suitability, Disclosure & Fiduciary Fiduciary breaches / guideline violations Suitability / disclosure issues (KYC, etc.) Retail customer disclosure violations Breach of privacy
Aggressive sales
Account churning
Misuse of confidential information
Lender liability
Event-Type Category (Level 1) Definition Categories (Level 2) Activity Examples (Level 3)
Improper Business or Market Practices Antitrust
Improper trade / market practices
Market manipulation
Insider trading (on firm’s account) Unlicensed activity
Money laundering
Product Flaws Product defects (unauthorised, etc.) Model errors
Selection, Sponsorship & Exposure Failure to investigate client per guidelines
Exceeding client exposure limits
Advisory Activities Disputes over performance of advisory activities
Damage to Physical Assets Losses arising from loss or damage to physical assets from natural disaster or other events.
Disasters and other events Natural disaster losses
Human losses from external sources (terrorism, vandalism)
Business disruption and system failures
Losses arising from disruption of business or system failures
Systems Hardware
Software Telecommunications Utility outage / disruptions
Execution, Delivery & Process
Management
Losses from failed transaction processing or process management, from relations with trade counterparties and vendors
Transaction Capture, Execution & Maintenance
Miscommunication
Data entry, maintenance or loading error
Missed deadline or responsibility
Model / system misoperation Accounting error / entity attribution error Other task misperformance
Delivery failure
Collateral management failure
Reference Data Maintenance
Monitoring and Reporting Failed mandatory reporting obligation
Inaccurate external report (loss incurred)
Customer Intake and Documentation Client permissions / disclaimers missing
Legal documents missing / incomplete
Customer / Client Account Management Unapproved access given to accounts Incorrect client records (loss incurred) Negligent loss or damage of client assets
Trade Counterparties Non-client counterparty misperformance
Misc. non-client counterparty disputes
Vendors & Suppliers Outsourcing
Vendor disputes
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