Summary
FUND 3.7 of the FCA Handbook outlines how the risk management framework for AIFs is organised for a full-scope UK AIFM. It signposts which managers and AIFs are within scope, how the separation of risk management from operating units is framed, how risk management systems and their review are structured, how maximum leverage levels link into that framework, and where to find supporting AIFMD Level 2 material. Core sections include:
Application
indicates which full-scope UK AIFMs and AIFs are in scope of the risk management provisions in FUND 3.7.
Functional and hierarchical separation
describes how this section frames the separation of the risk management function from portfolio management and other operating units.
Risk management systems:
outlines, at a high level, how the section organises references to systems, processes and tools used by an AIFM to identify, measure and manage risks for each AIF.
Review of risk management systems
summarises how the ongoing review and adaptation of risk management arrangements is positioned within the section.
Maximum leverage levels
highlights how the section links risk management to the establishment and use of maximum leverage levels for AIFs.
Subordinate measures
signposts the AIFMD Level 2 provisions and related measures that sit beneath and supplement the high-level risk management framework in FUND 3.7.
