Consolidated supervision is described as a comprehensive group-wide approach, evaluating the strength of an entire group, including factors like reputation, financial soundness, and overall risks affecting the group.

The risks considered include reputational risk, contagion risk, intra-group transactions, conflicts of interest, supervisory arbitrage, and the risk of double gearing. CIMA views consolidated supervision as integral to its risk-based approach, deciding whether it is necessary at the licensing stage or during the entity's regulated tenure. The supervision may be qualitative, quantitative, or a combination of both, extending beyond accounting consolidation.

The document emphasises consolidated supervision as complementary, not a substitute for solo supervision, as events and activities within the group can impact the regulated entity in ways detected only through solo supervision. The Policy's objective is to ensure effective consolidated supervision when CIMA serves as the home or host supervisor for a regulated entity within a group, aiming to identify, assess, and mitigate risks posed by other group members to the regulated entity and its branches.

Further information can be found in CIMA’s website here.

The Regulated Policy on Consolidated Supervision can be accessed here.