Paragraph 7 F1F2
To specify—
the risk management systems to be employed by AIFMs in relation to the risks which they incur on behalf of the AIFs that they manage;
the appropriate frequency of review of the risk management systems;
how the risk management function is to be functionally and hierarchically separated from the operating units, including the portfolio management function;
specific safeguards against conflicts of interest that allow for independent performance of risk management activities;
the following requirements—
to implement an appropriate, documented and regularly updated due diligence process when investing on behalf of the AIF, according to the investment strategy, the objectives and risk profile of the AIF;
to ensure that the risks associated with each investment position of the AIF and their overall effect on the AIF's portfolio can be properly identified, measured, managed and monitored on an ongoing basis, including through the use of appropriate stress testing procedures;
to ensure that the risk profile of the AIF corresponds to the size, portfolio structure and investment strategies and objectives of the AIF as laid down in the AIF rules or instruments of incorporation, prospectus and offering documents.
Annotations
Textual amendments
- F1
Regulations revoked (14.12.2023 for the revocation of reg. 79) by Financial Services and Markets Act 2023 (c. 29), s. 86(3), Sch. 1 Pt. 2 (with s. 1(4)); S.I. 2023/1382, reg. 2(c)(vi)
- F2
Sch. A1 inserted (31.12.2020) by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328), regs. 1(3), 15(2) (as amended by S.I. 2019/325, reg. 58 and The Financial Services and Economic and Monetary Policy (Consequential Amendments) (EU Exit) Regulations 2020 (S.I. 2020/1301), regs. 1, 3, Sch. para. 19(b)); 2020 c. 1, Sch. 5 para. 1(1)