Luxembourg Funds - Risk Management and Valuation

The course Risk Management and Valuation provides a comprehensive guide to risk management and valuation principles for various investment funds, including UCITS, AIFs, SIFs, RAIFs, and MMFs. It covers the establishment and implementation of risk management policies, procedures, and systems to monitor and mitigate risks such as market, credit, counterparty, liquidity, and operational risks. Each fund’s risk profile and limits must be defined according to its investment objectives and legal requirements.Valuation is crucial for ensuring accurate and transparent asset valuations under different regulatory frameworks, including the 2010 Law for UCIs and the AIFM Directive for AIFs. The course also explores the delegation of risk management functions while maintaining accountability. Emphasis is placed on clear communication with the CSSF (Commission de Surveillance du Secteur Financier) and providing full disclosures to investors about risks, methodologies, and any breaches of risk limits.The risk management function focuses on compliance with regulations, using measurement techniques like Value-at-Risk (VaR) and stress testing to evaluate risks under different market conditions. The course also details how MMFs manage unique risks, including internal credit quality assessments and stress testing in extreme scenarios.