On 19 August 2008, the Committee of European Securities Regulators (CESR) published a consultation paper entitled Risk management principles for UCITS. In the consultation paper CESR set out a framework for guidelines concerning risk management, providing principles and an outline of the key elements for a standard in risk management process. The principles are designed to apply to asset management companies and investment companies that have not designated a management company (self managed UCITS).

CESR has now published the feedback statement to the consultation paper. This feedback statement provides a summary of the main comments received by CESR along with an explanation of CESR’s preferred approach on some of the most significant issues raised. The feedback statement covers the following main areas:

  • The governance and organisation of the risk management process, in particular the modalities for identifying roles and responsibilities in the risk management process, clarifications on independence requirements, and conditions for outsourcing.
  • The identification and measurement of risks relevant to the UCITS, with a particular focus on the scope of risks to be managed and on how the requirement to use appropriate risk management tools should be understood.
  • The management of risks relevant to the UCITS, in particular clarifications on specific testing methods such as back testing and stress tests and how those may interact with the valuation process.
  • Reporting and monitoring.

View CESR’s consultation on the risk management principles for UCITS - Feedback Statement, 27 February 2009