AUSTRALIA: ASIC Consults on Risk Management in the Managed Funds Sector

Thursday July 21 2016

The Australian Securities and Investments Commission (ASIC) has released a Consultation Paper and proposed regulatory guidance on risk management practices for responsible entities in the managed funds sector.

Consultation Paper 263 “Risk management systems of responsible entities: Further proposals” (CP 263) and the proposed guidance builds on the proposals in Consultation Paper 204 “Risk management systems of responsible entities” (CP 204).

The proposed guidance does not impose new obligations on responsible entities but gives more detailed guidance on how they may comply with their current obligations under s912(1)(h) of the Corporations Act to maintain adequate risk management systems.

It outlines ASIC expectations for responsible entities to have:

• overarching risk management systems in place;
• processes for identifying and assessing risks; and
• processes for managing risks.

The proposals are intended to provide flexibility for responsible entities to develop and maintain risk management systems that are appropriate for the nature, scale and complexity of their operations. They also reflect international standards and developments in risk management.

ASIC is seeking to ensure that the risk management systems of responsible entities, include minimum procedures and practices, are adaptable to changing market conditions and remain effective in identifying and managing risks on an ongoing basis.

Comments on the Consultation are due by the deadline of 1 September 2016.

Click on the above link for further information.