FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
2003 Committee Charter : FBR
RISK POLICY AND COMPLIANCE COMMITTEE CHARTER
Adopted by the Board of Directors on April 16, 2003
There shall be constituted a standing committee of the board of directors (the "Board") of
Friedman, Billings, Ramsey Group, Inc. (the "Corporation") to be known as the risk policy and
compliance committee (the "Risk Policy and Compliance Committee").
II. COMPOSITION AND SELECTION
The Risk Policy and Compliance Committee shall be comprised of three or more directors, at
least three of whom shall satisfy the independence requirements of the New York Stock
Exchange for directors, as determined by the Board.
The members of the Risk Policy and Compliance Committee shall be appointed by the Board at
the Board's annual meeting and may be removed by the Board. The members of the Risk Policy
and Compliance Committee shall serve for one year or until their successors are duly elected and
qualified. The full Board shall elect a Chairman and, if a Chairman is not elected by the full
Board, the members of the Risk Policy and Compliance Committee shall designate a Chairman
by majority vote of the full Committee.
III. STATEMENT OF PURPOSE
The primary functions of the Risk Policy and Compliance Committee shall be to assist the Board
with respect to: (a) the assessment of the Corporation's risk management policies and
procedures; and (b) the assessment of the Corporation's compliance with legal and regulatory
IV. COMMITTEE AUTHORITY AND RESPONSIBILITIES
Among its specific duties and responsibilities, the Risk Policy and Compliance Committee shall:
1. Review and make recommendations to the Board with respect to the Corporation's
overall policies governing the financial commitments of the Corporation;
2. Review and discuss with management guidelines and policies to govern the process for
assessing and managing risk;
3. Review benchmarks for risk and major financial risk exposures;
4. Receive and review reports from management of the steps it has taken to identify,
monitor and manage such exposures;
5. Review management's performance against these polices and benchmarks;
6. Receive and review reports on selected risk topics pursuant to these policies;
7. Review the Corporation's capital allocation methodology;
8. Review the Corporation's policies and procedures for promoting and monitoring
adherence to the Corporation's policies and procedures regarding compliance with
applicable laws and regulations;
9. Review with management, the independent auditor, compliance personnel from the
Corporation's subsidiaries and the Corporation's Chief Legal Officer significant reports
to or inquiries received from regulators or governmental agencies that raise material
issues regarding the Corporation;
10. Discuss with the Corporation's Chief Legal Officer legal matters that may have a
material impact on the Corporation's financial statements or compliance policies;
11. As often as it deems appropriate, but at least annually, provide a report to the Audit
Committee with respect to compliance matters within the scope of the Risk Policy and
Compliance Committee's responsibilities and discuss with the Audit Committee the risk
assessment and management policies of the Corporation; and
12. Review and reassess the adequacy of this Charter annually and recommend any proposed
changes to the Board for approval, and annually review the Committee's performance.
The Risk Policy and Compliance Committee shall meet as often as may be deemed necessary or
appropriate in its judgment, and shall meet separately, at least quarterly, with the Corporation's
management, including the Director of Risk Management, appropriate compliance personnel of
the Corporation's subsidiaries and the Internal Auditor. The Risk Policy and Compliance
Committee shall report regularly to the Board with respect to its activities.
VI. OUTSIDE ADVISORS
The Risk Policy and Compliance Committee shall have the authority, to the extent it deems
necessary or appropriate, to obtain advice and assistance from internal or external advisors.