On 17th April 2013, ALFI and ALRiM teamed up to organise the 4th edition of the ALFI & PRiM Risk Management Conference.
On 17th April 2013, the Association of the Luxembourg Fund Industry (“ALFI”) and the Luxembourg Association of Risk Management (“ALRiM”) held the fourth edition of the ALFI & ALRiM Risk Conference focusing on the hot topics of Risk Management. Over 220 European Risk Managers, Conducting Officers and Experts turned up at the Luxembourg Chamber of Commerce to hear about the latest developments and trends.
The conference was opened by Olivier Carré, Co-Chairman of the ALFI Risk Management Committee and Marco Zwick, President of ALRiM, presenting briefly the key topics and challenges for the fund industry. They also presented the new ALFI & ALRiM Risk Management guidelines on Principles for Sound Stress Testing Practices and UCITS Liquidity Risk Management.
The conference provide detailed insights and information on latest developments in Risk Management for both UCITS and Alternative Investment funds in the areas of risk governance, risk measurement and management as well as risk reporting.
The morning session started with a keynote speech, focusing on and exploring risk management, regulation and investor protection. It was stated that “the requirements for AIFMs might be high, but might help to further improve the quality of fund management. Overall, the AIFMD risk management rules are thoroughly designed, which will help to avoid some past drawbacks.”
The following sessions focused on risk governance requirements and issues around risk measurement for UCITS. The sessions covered amongst others the new requirements for management companies and self-managed SICAVs, in particular through the ESMA guidelines on ETFs and other UCITS issues (ESMA/2012/832), the CSSF Circular 12/546 and the Delegated Act supplementing the Alternative Investment Fund Manager Directive (AIFMD Level 2) that was released on 19th December 2012.
The afternoon session featured two case studies on UCITS as well as one on AIFMD. The first case study explored key lessons from the financial crisis and other incidents over the past years and their impact on the approach towards UCITS Risk Management and second focused on stress test opportunity. At this occasion comments and insights were shared on how to construct a stress test, how to conduct the analyses of results and how and to whom to report?
Before the last case study, an introduction to risk management within the alternative investment fund industry was provided. The last case study outlined an example on how a risk manager may set-up adequate risk governance and risk management system for an alternative investment fund.
The day was concluded by the panel discussion "Experience gained from UCITS IV... paving the way for risk management governing alternative funds".
Please find below ALFI guidelines on Risk Management: