GFSL MIFIDPRU 8 Disclosures

Last updated: September 2025 for the financial year end 31 December 2024

Introduction and context

The Investment Firms Prudential Regime (IFPR) is the FCA’s prudential regime for MiFID investment firms which aims to streamline and simplify the prudential requirements for UK investment firms. IFPR came into effect on 1st January 2022, and its provisions apply to Goji Financial Services Ltd (“GFSL” or “the Firm”) as an FCA authorised and regulated firm.

GFSL is classified as a non-small and non-interconnected (“non-SNI”) MIFIDPRU Investment firm.

As a non-SNI Firm, GFSL is required to make disclosures in respect of the following:

• Governance;
• Risk Management;
• Own funds;
• Own funds requirements; and
• Remuneration Policy and practices.

GFSL publishes this disclosure annually on the publication of its annual financial statements.

1. Governance

1.1. Overview of Governance Arrangements:

1.1.1. The Board

The GFSL Board (“the Board”) holds ultimate responsibility for the governance of the Firm. The Board has ownership of the key strategic and operational decisions and is responsible for ensuring that GFSL meets its statutory and regulatory obligations.

The Board meets quarterly with a standing agenda covering:

• Financial Statements and Capital adequacy;
• Risk factors;
• Client money obligations;
• SYSC issues;
• Changes to processes, policies or procedures;
• RegData reporting submissions;
• Training schedule;
• Complaints;
• Key supplier diligence;
• Data protection and information security updates;
• Compliance monitoring;
• Emerging risks; and
• Any other business items.

The Board is comprised of two members:

• Chief Executive Officer; and
• Chief Financial Officer.

1.1.2. The Risk Committee

The Firm is not required to establish a risk committee under MIFIDPRU 7.3.1 – but has elected to do so voluntarily.

The Risk Committee is responsible for the implementation, maintenance and annual review of the risk management framework and oversight of the Firm’s risk management activities.

1.1.3. Diversity

Whilst the Firm has no specific diversity policy, it endeavours to promote an inclusive working environment and continues to monitor diversity on an ongoing basis, including at a Board level.

1.1.4. Directorships

The Firm has no directors which hold other directorships which meet the definition under MIFIDPRU 8.3.1 R (2).

2. Risk Management

2.1.1. Approach to Risk Management

GFSL’s risk management framework is built around the business strategy and risk appetite set by the Board. Risk appetite represents the maximum risk the Board is willing for the business to take in pursuit of its strategy and business objectives. It is set below capacity to avoid triggering recovery plans. Management proposes and the Board approves risk appetite statements that succinctly express its appetite for each risk category. The statements are intended to ensure that only risks consistent with that strategy are taken and that all other risks are minimised.

The purpose of the framework is to have a simple, usable and complete framework that allows GFSL to identify existing and potential risks and manage these to a tolerable level that allows the Firm to achieve its business objectives. This framework is continually monitored to ensure ongoing compliance, thereby enabling Goji to create and preserve value without comprising its overall risk profile.

GFSL operates an overall low tolerance for system & data, credit, and compliance risk. GFSL sets a medium risk appetite for people, process, recovery, legal, conduct & culture, liquidity, and market risk and a higher and proportionate risk tolerance for strategic & business, and change & product risks to enable its strategic objectives in a market that is rapidly evolving with regulatory changes and technology advancements.

GFSL operates two lines of defence to identify and manage its risks:

• The first line of defence is delivered by frontline staff (including the management team) who are responsible for operating processes; supported by documented operational, and functional technological controls. Staff must have the experience, tools and information to own and manage the frontline risks.
• The second line of defence is delivered by the Compliance team and the Risk Committee, which are responsible for providing the policies, frameworks, support and culture to enable risk and compliance to be managed in the first line. Compliance also conducts appropriate monitoring to assess the effectiveness of first line risk management.

The Risk Committee also reviews the risk register which maintains identified risks, risks scores, mitigations and actions. The Firm is not currently of a size or complexity to warrant an internal audit function.

2.1.2. Roles and Responsibilities

Each member of the Risk Committee is responsible for identifying, flagging and managing the risks pertaining to their functional areas and should consider risk identification a critical part of their jobs.

Any new or emerging risks can be raised directly with the Team Manager, the Risk Committee and/or Compliance.

Risks may also be identified by third parties, such as external auditors, suppliers or customers.

Risk Committee members are responsible for recording risks in a centralised risk register.

Once a risk has been identified and added to the register, it is assigned a risk owner and is categorised by business area and risk type. The key risk areas of the business have been identified as follows:

• Change & Product Risk;
• Compliance Risk;
• Conduct & Culture Risk;
• Credit Risk;
• Legal Risk;
• Liquidity Risk;
• Market Risk;
• Operational Risk; and
• Strategic & Business Risk.

2.1.3. Key Risk Categories

In line with MIFIDPRU 8.2, this section provides a summary of the Firm's risk management approach in addressing the categories of risk covered by MIFIDPRU 4 (own funds requirements), MIFIDPRU 5 (concentration risk), and MIFIDPRU 6 (liquidity risk).

Own Funds Risks

As part of the Goji group, GFSL provides regulated services to facilitate the arrangement of deals in private debt and equity securities for asset managers and investment platforms. As part of this activity, the Firm also holds client money and safeguards client assets.

Failures or outages of the Firm’s technology, or the technology of its payment service providers could result in harm to the Firm’s customers – either through the inability to use GFSL’s services or expose them to financial harm as a result of CASS non-compliance.

In order to mitigate against these risks, the Firm has allocated additional financial resources to mitigate these risks. Paired with the Firm’s robust controls and ongoing diligence of payment service providers the Board believes this is sufficient to mitigate the risk of the harm posed.

Concentration Risk

GFSL does not undertake any customer orders with respect to derivatives, conduct any trading on its own account or have regulatory permissions for dealing as principal. The Firm’s concentration risk is therefore limited to such 4 risk arising from the location of client money and custody assets, its cash deposits and earnings. GFSL has in place appropriate controls and monitoring to manage this concentration risk.

Liquidity Risk

Goji maintains minimum liquidity at all times in compliance with the Basic Liquid Asset Requirement (“BLAR”) being at least 1/3 of its fixed overheads requirement (“FOR”). GFSL does not provide any client guarantees and therefore its liquidity requirement is driven by its expenses, as captured by the FOR.

The Firm is exposed to limited liquidity risk. GFSL’s liquidity inflows and outflows relate to the Firm’s revenue and operational expenses. GFSL monitors its exposure to liquidity risk through cash flow forecasting and stress testing to ensure the Firm has sufficient liquidity in excess of minimum regulatory requirements.

2.1.4. Approach to assessing the effectiveness of the Risk Management Function

The Board and Risk Committee ensures the risk management framework remains proportionate as it is kept under review on an ongoing basis. This is also reviewed annually as part of the ICARA process. The Firm continues to embed an enhanced risk management framework which is subject to on-going review and assessment.

3. Own Funds

3.1. Composition of Own Funds

3.2. Reconciliation to audited financial information

The table below shows a reconciliation with own funds in the balance sheet where assets and liabilities have been broken down by asset and liabilities classes respectively. The information in the table below reflects the balance sheet in the audited financial statements.

3.3. Main features of the Firm's own fund instruments

All own funds instruments in issue are fully paid-up ordinary shares.

4. Own Funds Requirement

4.1. Overall Financial Adequacy

In addition to the basic own funds requirement, the Firm is also required to calculate its additional ongoing own funds requirement. The ongoing own funds requirement requires firms to address any firm specific, residual harms that are not adequately covered by the basic own funds requirement addressed above. This is to ensure that sufficient own funds are held against all sources of harm that the Firm can pose. GFSL also maintains a wind-down plan, which is refreshed on at least an annual basis. As part of the wind- down planning process management determine the financial resources required to wind the Firm down in an orderly manner. The output of these two assessments forms the basis of GFSL’s own funds and liquid asset threshold requirements.

The above assessments are made through the Firm’s ICARA process. The ICARA is prepared with input from subject matter experts from across the business.

In conjunction with this identification of GFSL’s threshold requirements management also considers those longer term risks which could crystallise over the three-year forecast period and related stress scenarios. As part of this exercise GFSL has considered the potential recovery actions which could be implemented in the event a stress scenario crystallises. Where sufficient recovery actions could not be implemented to maintain the viability of the Firm the Board would trigger GFSL’s wind down plan.

5. Remuneration

5.1. Qualitative Disclosures

The Firm is not required to establish a remuneration committee and given the size and limited complexity of its business has not done so. Decisions on remuneration and changes to the remuneration policy are undertaken by the Board.

The purpose of the Firm’s remuneration arrangements is to ensure salaries are fair in comparison to market rates and are set at a level that attracts and retains talent.

5.1.1. Types of remuneration

Staff receive a fixed annual salary. The Firm does not offer guaranteed variable remuneration or severance payments or operate other forms of variable remuneration.

5.1.2. Financial and non-financial criteria:

Fixed annual salaries are set following an annual benchmarking exercise and performance review. Salary data is collected for similar organisations to establish the 'market rate' for specific roles. Additional factors are considered, where relevant, as part of the benchmark process, including relevant prior experience, tenure, qualifications, performance, other benefits and location.

5.1.3. Material risk takers

Two staff have been identified as material risk takers (“MRTs”) and are both members of the GFSL Board. Therefore, all MRTs have been identified as members of Senior Management.

5.2. Quantitative Disclosures

The Firm paid £349,598 of fixed remuneration to the Firms MRTs. No variable remuneration, including awards of guaranteed variable remuneration or severance pay, were made to any individuals in the period.