Overview
Chief Risk Officer for Asset Management Company (Mutual Funds)
Job Description:
The CRO shall be responsible for ensuring that there is an effective governance framework and reporting framework of risk management in line with the regulatory requirements.
The risk management roles of the CRO are as under:
– Implementation and governance of Risk Management Framework across the organization.
– Review specific responsibility of management, including CEO, CIO, CXOs, and Fund Managers.
Ensure formulation and implementation of an adequate mechanism for:
– Generating early warning signals.
– Conducting stress testing for investment, credit, and liquidity risks basis approved parameters.
– Define the tolerance limits for each of the risk parameters.
– Measurement and review of AMC and scheme specific risks including RCSA and the person responsible to monitor the risks.
– Measurement and review of AMC and scheme specific risks including RCSA and the person responsible to monitor the risks.
– Formulation of Fraud Risk Registers and Frauds response plan / strategies.
– Escalation matrix for reporting and resolution of incidents (loss, near miss, fraud etc.)
– Ensure review of operations for material outsourced activities at least on an annual basis.
– Adequate framework to detect and prevent security market violation, frauds and malpractices by the AMC and reporting framework on the same to the ERMC and board Trustee on half yearly basis.
– Put in place mechanism for risk reporting at least on a quarterly basis to the board of AMC, trustees, and RMCs, covering:
– Risks including risk metrics, escalation of material risk-related incidents, timely and corrective actions taken if any.
– Risk reports and dashboards capturing deviations to risk thresholds, risk appetite across AMC and Scheme.
– Results of monitoring of early warning signals by respective functions
– Result of stress testing based on defined parameters for investment, credit, and liquidity risks, etc.
– Internal and external fraud incidents reported/identified by CXOs including evaluation of fraud risk scenarios.
– Near miss and loss incidents identified and reported by the respective departments.
– Monitor liquidity risk including asset liability mismatch at a scheme and portfolio level vis- vis internally approved and defined liquidity model monthly.
– Major findings and corrective actions prepared by the CXOs.
– Monitor delays in implementation of corrective actions by CXOs.
– Monitor control breaches because of periodic RCSA review and mitigating actions put in place by the management and risk function.
– Independent assessment of reporting of risk to various committees and CEO, etc.
– Put in place mechanism for reporting to CEO – Including outcomes for risk management function on monthly basis.
– The reporting of risk as above is independent from the CIO and verified by the risk team.
– There is a Delegation of Power approved by the Board of AMC for risk management by CRO covering the following:
– Daily risk management
– Daily risk reporting
– Corrective actions at the level of Fund manager, CIO, and CEO.
– The CRO shall inform to board of AMCs, trustee and risk committees regarding any major findings or corrective actions required and update on closure or the status of various recommendations.
– Formulate and recommend changes to roles and responsibilities including KRAs relating to risk management activities and place these at the RMCs for approval.
– Review and suggest changes to the risk appetite and risk metrics for AMC and scheme as defined by the CEO.
– Ensure insurance cover is maintained based on AMC and Trustee approval for the MF operations and third-party losses.
– Approve investment limit setup such as minimum number of stocks/securities, cash (net of derivatives), stocks/securities vis-a-vis benchmark and Beta range, regulatory limits.
Define process to assess the control against each of the identified risk capturing following elements:
– Measurement tool for each risk (RCSA, Stress Testing, etc.)
– Monitoring and reporting frequency
– Reporting of breaches
– Identify, assess, and estimate emerging risks and their possible impact on AMC and mutual fund schemes
– Report existing and emerging risks associated with the MF and AMC activities in a structured manner to the ARMC & TRMC
Educational Qualification:
– CA / MBA Finance / FRM