Article 39 | Delegated Regulation 231/2013

Article 39 - Permanent risk management function

Article 39

Permanent risk management function

An AIFM shall establish and maintain a permanent risk management function that shall:

(a)

implement effective risk management policies and procedures in order to identify, measure, manage and monitor on an ongoing basis all risks relevant to each AIF’s investment strategy to which each AIF is or may be exposed;

(b)

ensure that the risk profile of the AIF disclosed to investors in accordance with point (c) of Article 23(4) of Directive 2011/61/EU is consistent with the risk limits that have been set in accordance with Article 44 of this Regulation;

(c)

monitor compliance with the risk limits set in accordance with Article 44 and notify the AIFM’s governing body and, where it exists, the AIFM’s supervisory function in a timely manner when it considers the AIF’s risk profile inconsistent with these limits or sees a material risk that the risk profile will become inconsistent with these limits;

(d)

provide the following regular updates to the governing body of the AIFM and where it exists the AIFM’s supervisory function at a frequency which is in accordance with the nature, scale and complexity of the AIF or the AIFM’s activities:

(i)

the consistency between and compliance with the risk limits set in accordance with Article 44 and the risk profile of the AIF as disclosed to investors in accordance with Article 23(4)(c) of Directive 2011/61/EU;

(ii)

the adequacy and effectiveness of the risk management process, indicating in particular whether appropriate remedial measures have been or will be taken in the event of any actual or anticipated deficiencies;

(e)

provide regular updates to the senior management outlining the current level of risk incurred by each managed AIF and any actual or foreseeable breaches of any risk limits set in accordance with Article 44, so as to ensure that prompt and appropriate action can be taken.

The risk management function shall have the necessary authority and access to all relevant information necessary to fulfil the tasks set out in paragraph 1.

CHAPTER I - DEFINITIONS (Article 1)

CHAPTER II - GENERAL PROVISIONS (Article 2-15)

CHAPTER III - OPERATING CONDITIONS FOR AIFMs (Article 16-82)

SECTION 1 - General principles (Article 16-29)

SECTION 2 - Conflicts of interest (Article 30-37)

SECTION 3 - Risk management (Article 38-45)Article 38 - Risk management systems GL Article 39 - Permanent risk management function GL Article 40 - Risk management policy GL Article 41 - Assessment, monitoring and review of the risk management systems Article 42 - Functional and hierarchical separation of the risk management function Article 43 - Safeguards against conflicts of interest Article 44 - Risk limits GL Article 45 - Risk measurement and management GL

SECTION 4 - Liquidity management (Article 46-49)

SECTION 5 - Investment in securitisation positions (Article 50-56)

SECTION 6 - Organisational requirements — general principles (Article 57-66)

SECTION 7 - Valuation (Article 67-74)

SECTION 8 - Delegation of AIFM functions (Article 75-82)

CHAPTER IV - DEPOSITARY (Article 83-102)

CHAPTER V - TRANSPARENCY REQUIREMENTS, LEVERAGE, RULES RELATING TO THIRD COUNTRIES AND EXCHANGE OF INFORMATION ON THE POTENTIAL CONSEQUENCES OF AIFM ACTIVITY (Article 103-116)

CHAPTER VI - FINAL PROVISIONS (Article 117)

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