EUROPE: CESR Gives Advice to Commission on Risk Management Principles for UCITS

Friday February 27 2009

The Committee of European Securities Regulators (CESR) has today, 27th February 2009, delivered its final advice to the European Commission on risk management principles for UCITS.

The paper proposes a framework for guidelines concerning risk management, providing principles and an outline of the key elements for a standard in the risk management process. As such it builds on the publications of national regulators – for example CSSF Circular 07/308 and Irish UCITS Guidance Note 3/03 on Financial Derivatives Instruments.

In addition to our extensive UCITS III and derivatives training, Funds-Axis have supported a number of Managers in development of their risk management process and RMP documentation. The Funds-Axis GRCTM application supports the embedding of derivatives risk controls and also features a “Derivatives Dashboard.”

The Investment Management Expert Group within CESR have conducted a survey on how the 2004 EC Recommendations on Derivatives Usage by UCITS had been implemented in the different EU jurisdictions. CESR have today published further work based on the priorities expressed by CESR members.

The principles proposed by CESR reflect the need to ensure that investors are adequately protected and that the risk management process is appropriate in view of the nature, scale and complexity of the asset management company’s activities and of the UCITS it manages.

To view the advice please click on the above link, and to view the feedback statement, please click here.