The financial crisis and increased regulatory scrutiny underscore the need for financial services firms to better understand, monitor and disclose their risks, in particular when investing in more complex products and strategies. As a result, regulators are now increasingly concerned about risk monitoring and transparency and more risk and compliance monitoring will be imposed on the investment community going forward. UCITS IV new risk guidelines and requirements clearly illustrate this trend.
Investment managers, service providers and investors need to extend the scope and depth of their risk reporting and monitoring to better understand their overall risk as well as fulfill their regulatory reporting obligations.
Duff & Phelps provides a range of risk management services to support financial services firms to operate a viable risk management framework, function and processes, including:
- Substance and risk infrastructure solutions, including third party management company services, outsourcing of the risk function, designated person services, conducting officers and independent directorships
- Review of the risk management process
- Compliance with investment limits and policy
- Operational risk
- Exposures, leverage and concentration
- Market risk analysis (including stress testing)
- Risk modeling, testing, monitoring and reporting
- Value at risk, commitment and notional risk approach
- Liquidity risk
- Issuer and counterparty risk
- Monitoring, responsibilities and escalation procedures