Regulatory compliance
The European UCITS III directive - New opportunities, new challenges
The new European UCITS III directive gives asset managers and investment trusts increased flexibility when it comes to selecting investment products, particularly with regard to derivatives, structured products, and hedge funds. But this new freedom comes at a price: The implementation of UCITS III has placed new regulatory requirements on risk management and risk measurement for funds that use derivatives to control risk and enhance their performance. This has far-reaching consequences for processes, systems and controls.
But these challenges are not at all fundamentally new to the financial markets as a whole. In UCITS III, many long-standing requirements for modern risk management at banks - such as CAD 2 and internal value-at-risk models (VaR) - are arguably extended to asset managers.
See what your company can gain from d-fine's expertise
Reap the benefits of our practical experience in the implementation of UCITS III. After all, our core competency lies in risk management for banks and financial services providers. We advise our clients' risk management and controls departments in all professional, methodological and technical matters, and can look back on many years of experience in this field: we were already helping banks back in 1997 to implement new regulatory requirements for market risk management and VaR models - rapidly yet comprehensively. Since then, we have been working closely with our clients to develop and enhance their risk measurement methods and processes, supporting banks and investment firms alike - the latter in the implementation of UCITS III in particular.
Our services offering covers:
- Design and implementation of consistent and risk management standards, methods and processes, both internal and external
- Selection and roll-out of systems designed to support the necessary processes in daily operations and to determine the relevant risk and performance figures
- Documentation of your methods, processes and systems in preparation for internal and external audit, and/or the supervisory review of your risk model
We cover all market, credit and operational risks with our tried-and-tested approach. Our extensive project experience puts us in a unique position to give you the answers you need:
- Which risk factors are important?
- What are adequate methods for determining value-at-risk?
- What does a viable stress test look like?
- How do we take spread risks into account?
- How do we determine the parameters used to calculate risk?
- How can we perform both accurate and stable clean back-testing?
- How do we treat structured products?
- What are the documentation requirements for an internal risk model?
- How can independent risk measurement be embedded into an investment firm's organization?
Use our expertise to implement UCITS III swiftly and efficiently. Or if you want an independent partner with many years of experience in risk modelling to review your own implementation work, contact us. We look forward to winning you over.
Contact:
Dr Andreas Werner
Tel: +49 (0)69 90737-310
