2. A SIPS operator shall hold liquid net assets funded, by equity, e.g. common stock, disclosed reserves or other retained earnings, so that it can continue operations and services as a going concern if it incurs general business losses. The amount of these assets shall be determined by its general business risk profile and the length of time required to achieve a recovery or orderly wind-down of its critical operations and services if such action is taken.
1. 1. A SIPS operator shall establish robust management and control systems to identify, monitor,monitor and manage general business risks, including losses resulting from poor execution of business strategy, negative cash flows, or unexpected and excessively large operating expenses.
2. 3. A SIPS operator shall maintain a viable recovery or,and, except for Eurosystem SIPS, orderly wind-down plan.plan as required under Article 5(4).
3.A SIPS operator shall determine, based on its general business risk profile and the time required to achieve a recovery and/or orderly wind-down of its critical operations and services, the amount of assets required to implement the plan referred to in paragraph 2. This amount shall be no less than that represented by six months of current operating expenses.
4. 4.To A SIPS operator shall hold sufficient liquid net assets funded by equity to implementcover the planamount referred to in paragraph 3. As a minimum,3, a SIPS operator shall hold liquid net assets funded by equityequity, withe.g. common stock, disclosed reserves or other retained earnings, to enable it to continue operations and services as a valuegoing equal to at least six months of current operating expenses.concern. These assets areshall be in addition to resources held to cover participant defaultsdefault or other risks covered under Articles 6 and 8. Equity held under international risk-based capital standards may be included to avoid duplicate capital requirements.
5. 5.Assets Assetsas referred to in paragraph 4 held to cover general business risk shall be of sufficient liquidity and high quality to be available in a timely manner.manner, and shall be segregated from the SIPS operator's assets used for daily operations. The SIPS operator shall be able to realise suchassets assetsheld to cover general business risk with little, if any, adverse price effect, soto thatenable it canto continue operations and services as a going concern if it incurs general business losses.
6. 6. A SIPS operator shall establish a viable capital plan for raising additional equity shouldif its equity fallfalls close to or below the amount referred to in paragraph 4. The plan shall be submitted to the Board for approval and be updated at least annually.3.
7. 7. Paragraphs 2 and 43 to 6 shall not apply to Eurosystem SIPS.